labor is going to be your biggest cost
so figure out what you need the pros to do and what you/dad/friends who will work for free
My SideFiReco™ would be:
talk to a loan person about a ReFi with cash out and see where the numbers land, shouldn't cost you more than a credit check
Personally not a big fan of the HELOC, but it's a waaay easier process, but understand all the deets before you go that route
The no closing costs often is why HELOC work better for a lot of people
but it's basically a credit card...but the interest is deductable
I really think you could pull some equity out to pay for a large part of this and not increase your monthly costs with the way the rates are (right now) and if it does, we're talking like $50 a month over 30 years
You definitely shouldn't do what her parents did...that is a real danger of this stuff and saw lots of people get in trouble doing this stuff
although I want to hear more about the indiscretions
but pulling $10-15k of equity out and lowering your rate really isn't anywhere near to what they did
again, this should add value to your property, if done right