It depends mostly on how much you are pulling out relative to what you owe on the first. A HELOC or second mortgage almost always carries a higher rate than a first (how much higher depends on loan-to-value and credit), while your VA first is already at a strong rate. Carrying a low-rate first plus a higher-rate second can pencil out fine when the addition is small relative to your balance, because the blended rate across both stays low. When the amount you need is large relative to your balance, the second-lien rate drags the blend up, and a cash-out refinance of the whole loan into one rate can come out better. One important VA detail: a VA cash-out refinance is a full-documentation loan with an appraisal. The low-documentation VA streamline (the IRRRL) is rate-and-term only and cannot be used to pull cash out, so it is off the table for funding the addition itself. On waiting for lower rates: nobody can promise where rates go, so do not build the plan around a future drop. If the two paths come out close, weigh flexibility too. A HELOC lets you draw and repay as the project moves; a refinance locks the full amount at once. The right call is a blended-rate calculation on your actual numbers, and we are happy to run both paths with you on the free Roadmap conversation.