Preparing for a Home Remodel? Explore Your Home Remodel Financing Options

Key Takeaways: 

• You’re never out of options when it comes to financing your home remodel. 
• Some financing options leverage the equity you have amassed over the years; others do not. 
• You can pair one finance option with another to get maximum benefits. 

You've mapped out the entire remodel, and it's exciting to envision just how everything will come together, but how are you going to pay for it? There are several funding options; some that leverage your home equity and others that do not. Let's review them to see which one will work best for you. 

Ways to Pay for Your Home Renovations

Your best options, when it comes to sourcing financing for your home remodel are: 

Save for it 

Planning ahead and saving money is the most desirable way to finance your home renovations. It does not touch on your home equity, and you do not have to apply for loans to renovate your home. Start saving an amount of money every month to a separate savings account (Here are some ways to save $100), but know that it could take you a while to bring together all the money you’ll need. You might be better off securing financing, completing the renovation project, and repaying the loan over time. 

Borrow against your equity

If you have accumulated considerable equity through your mortgage payments, you could borrow against it and pay for the renovations. A home equity line of credit (HELOC) or a home equity loan, could get you up to 85% of the value of the home, less the unpaid mortgage. A HELOC, in particular, works well for projects with unclear costs like home remodels where one issue can bring up a string of other issues.

The advantage of either of using these secured financing options for your home remodel project is that their loan terms are easier compared with those of unsecured loans. Therefore, if you're planning major renovations that require a substantial investment, opt to finance them with a lower-cost secured loan.

Cash-out refinancing 

Another home remodel financing option that leverages your home equity is cash-out refinance. With this one, you take out a larger mortgage, pay off your current mortgage, and allocate the remaining funds for your home remodel or for other expenses (be careful to stick to your budget). However, this one is an option only if you have amassed considerable equity in your home or if the value of your home has grown over the years. 

Use a credit card with an introductory APR

If you're only doing minor renovations, you don't need to take out loans to renovate your home. Take out a 0% percent APR credit card, pay for the home remodel, and pay off the balance before the promotional period elapses. It's one of the best financing options for small projects because you get the amount you need and have an extended period to pay it off without incurring interest charges. 

Alternatively, you could get a regular credit card with high-value rewards and pair it with a balance transfer card. Use the rewards card to pay for your home renovations, and then quickly transfer the balance to the card with an introductory APR. If you pay off the balance within the introductory period, you get to avoid interest, and you bag rewards from the other credit card.

Apply for a personal loan

Personal installment loans are a quick and easy way to get funds to renovate your home. Together with credit cards, this is one of the home remodel financing options that do not risk your home equity. However, unlike credit cards that cater to small renovation budgets, a personal loan can yield available enough funds to cover your project plus other personal expenses. If you borrow from an online lender, you also get less stringent repayment terms that make it easier to manage debt.

Get A Minute Loan Center Personal Loan

Minute Loan Center is an industry leader in the online lending space. We offer easy-to-get financing options for home remodel projects, offering a high credit limit that may cover your home remodel expenses fully. You could take out a personal installment loan or a line of credit to pay your expenses. 

Don't risk the home equity that has taken you years to acquire. Create your account and apply for a personal loan to pay for your home renovation today!