Paying for a pool with your home's equity

Pool financing with home equity means taking a second mortgage against your house and using the money to build the pool. A HELOC for a pool (a home equity line of credit) lets you draw as each stage of construction comes due. A home equity loan for a pool gives you a lump sum at a fixed rate. Either way, your first mortgage stays as it is, and the loan is sized on your home's value today. The calculator below shows roughly how much equity you could reach.

Pool loan vs home equity: what is the difference?

A pool loan is a loan marketed for the purpose. Many are unsecured personal loans, and some are secured by the pool or the property. A home equity loan or HELOC is secured by your house, which is the trade-off to understand. Because the lender can take the house if you stop paying, the rate is usually lower than an unsecured loan. The risk is yours too.

Three things usually decide which is cheaper for you: the interest rate, the fees to open the loan, and how long you take to repay it. Ask each lender for those three numbers on the same loan amount and term. Our comparison page lays out HELOC, home equity loan and cash-out refinance side by side.

A pool is rarely just a pool

Most pool budgets grow. The pool itself is one line. Then come decking or a patio, fencing and safety covers that local rules may require, electrical work, landscaping, lighting, equipment, and sometimes an outdoor kitchen or shade structure. A line of credit handles that better than a fixed loan, because you draw for each piece as the bill arrives and pay interest only on what you have borrowed.

If your contractor gives you a firm price for everything, a home equity loan is simpler: one amount, one rate, one payment.

HELOC for a build paid in stages

Pool builds are paid in stages. A deposit, then payments at excavation, framing and plumbing, the shell, decking and the final finish. A HELOC matches that schedule. You pay interest only on what you have drawn, and the rate is variable, so the payment moves with prime. Read the cap and the draw period before you sign. A line sized a little above the bid leaves room for extras.

What to know before you borrow

• The loan is sized on today's value. The appraisal values the house as it stands now, before the pool exists.
• A pool may not add what it costs. Resale value varies by market and by buyer, so do not count on the pool paying itself back.
• Running costs are real. Chemicals, power, cleaning, insurance and repairs add to the loan payment.
• Get bids first. Two or three detailed bids tell you the real number and let the loan be sized to it.

Pool projects often sit alongside a bigger plan. See our guide to using home equity for a renovation if the pool is part of a backyard remodel.

What we need

We will tell you exactly which documents apply once we talk. Generally the list looks like this.

• Your most recent first mortgage statement.
• Income documentation. Pay stubs and W-2s for employees. Self-employed homeowners can use our bank statement home equity loan, which qualifies on 12 months of business deposits instead of tax returns.
• A contractor bid or project budget, so the loan is sized to the build.
• Your homeowners insurance declarations page.

1. Run the number. Use the equity calculator to see roughly how much equity you could reach. No credit pull, no contact info.
2. Get bids. Then call or text (916) 755-6080 and a loan officer will match the bid to a line or a loan.
3. Send documents and order the appraisal. We route the file to the program that fits.
4. Close and build. Draw from the line as each stage comes due, or pay the contractor from the lump sum.

More questions? The full FAQ covers the rest.