Almost 60% of homeowners across the country have hopes or plans to renovate some aspect of their home in the near future. It’s hard not to catch the bug to make your space more functional for your specific lifestyle or reflect your personal style.
But those kinds of home renovation projects often aren’t free and can even be quite expensive. Homeowners often have to get creative to come up with the funding to make their dreams a reality.
Luckily, there are a lot of financing options so every homeowner can find the one that fits their situation the best. Here are eight of the most common options!
1. Save Up Cash
One of the best ways to pay for a home renovation is to save up so that you can pay for the project with cash. This way there’s no debt added to your personal finances or impact on your credit score.
Often, it takes a homeowner quite a bit of time to be able to save up enough cash to pay for a major job like this. But that discipline and dedication often make the end result that much sweeter and more enjoyable. You really become connected to the renovation.
It’s important to have a clear estimate for what the project will cost so you are able to complete the whole thing at once.
2. Liquidate Assets
When you get an idea in your head that will make your home life easier or more enjoyable, it’s hard to put it off until enough money is saved.
That’s why many homeowners decide it’s worth it to liquidate some assets to boost that savings account much quicker. This could look like selling properties, vehicles, or even businesses. Some homeowners cash out their investments as well. It’s a great way to make sure your home renovation is the top priority of your financial situation.
3. Home Renovation Grant
In some very specific circumstances, homeowners are able to get a home renovation grant to help pay for their DIY projects or work done by a professional.
Most grants are given based on the specific location of the home and are designed to help improvements be made in neighborhoods to raise property values. They can also be given to aid in the improvement and restoration of historic buildings before they get destroyed.
While the process might take some extra work and time, it’s worth it to get all or a portion of the renovation covered for you.
4. Use Credit
While not the most financially responsible decision for every homeowner, some can have success funding their home renovation through the use of their credit cards.
It takes a lot of discipline and planning to keep on track with your project and not let your debt rise to an unmanageable level. The key to being successful with this route is making a clear plan of what purchases will be made, what the timeline will be, and what the specific plan is for paying it off as well.
5. Line of Credit
Along a similar line, many homeowners can get a line of credit through a bank or other lending option. This gives you the option to have a large amount of money available to you quickly that’s based on the equity you already have in the home.
Many people prefer this option because it almost always comes with a lower interest rate than other lending options, which means you’ll end up paying much less overall. This is an especially helpful and efficient way to get the money you need upfront if you’ve owned the home for an extended period of time.
6. Renovation Loan
For those homeowners who haven’t built up a significant amount of equity in their homes yet, a renovation loan is another great option.
This option is very self-explanatory and commonly understood, especially for homeowners who likely went through a loan application process to get the house itself. In order to get the funds, you’ll have to prove your financial situation is stable enough to be able to pay it back.
The key to being successful with this route is to study the market and find a loan when interest rates and terms are most beneficial for your situation.
7. Sweat Equity
Sometimes there’s no way you’ll be able to secure the full financing you need in the timeline you’re looking for. When that’s the case, it might be time to look into making a sweat equity deal.
Sweat equity is when you put in the labor and work to complete the project (or at least a portion) yourself to save money overall. This way you’re only paying for materials and maybe specific portions of the project that have to be completed by a professional.
It’s a great way to get your projects done much more effectively, especially if you have the skills necessary already.
8. Step by Step
A home renovation is great and can change the way you live your life. But it can also get out of hand quickly and have negative effects on your financial situation.
To avoid this, many people choose to split their renovation into phases to help ease the burden and not get too overwhelmed. This is also a great way to ensure you don’t rush decisions and get the final result you’re actually looking for. Sometimes taking a few extra months to get things done can be a huge benefit.
Finance Your Home Renovation
Every homeowner wants their home to be a comfortable, safe, and helpful place to spend their time. The space should work for your everyday activities and reflect your personality.
When it doesn’t, it’s time to look into the home renovation to get what you’re looking for. There aren’t many problems that can’t be solved through some changes and improvements, you can feel more and more at home through a few simple projects. Securing your finances is the first step towards your dream home!
If you’re interested in learning more about home renovations, check out our other articles!
*Photos by Blue Bird