HELOC vs. Cash Out Refinance

[Chris Reichenbach]

I am getting ready to do some updating to my home before I furnish and make it a medium term rental. I plan on using credit lines to fund all of the rehab but am curious about my options to pay them off through a cash out refinance or a HELOC?

The cash out refinance seems pretty straight forward by getting an appraisal after the rehab is complete and getting 80% of my cash out. However, a few different lenders have been trying to push me towards a HELOC but a HELOC on my current equity would not cover all of my rehab expenses.

Would it be possible to fund the rehab through my credit line like I planned and pay it off with a HELOC based on the new appraisal after the rehab is complete? Or would sticking with a straight cash out refinance be more beneficial to paying off the credit line?