In my opinion cash out refinancing your present home loan will be a good option. If you go for a home improvement loan after refinance, you will have to pay for the closing fees twice. If you go for cash out refinancing, you need to pay the closing cost only once and you will get the cash out which can be used for home improvements.
Yeah, I agree with Niicss. However to be sure you have to consult an expert to that and let him or her analyze your current situation to come up with an accurate solution to your problem.
Please also consider using the FHA program for remodeling and rehabilitation, which is the 203(K) loan. This program allows for the refinance as well as the additional funds needed for you to accomplish the improvements you are desirous of making. Check with your lender(s) to see if they're participating in the program through FHA; and shop around if you need to do so, in order to learn more about this fine financing program.
