Renovating the interior of your home isn’t going to be cheap. Doing something as simple as a kitchen remodel will cost you almost $20,000 on average.
Most people don’t have that kind of money lying around. If you’re one of them, you’ll want to learn about the renovation financing options that you’ll have.
You can finance a home renovation in a handful of different ways. Find out five options that you’ll have when it comes to paying for home renovations below.
1. Borrowing Money From Family
Generally speaking, borrowing money from family members isn’t always a great idea. You might end up ruining your relationships with family members if you take out a loan from them and don’t pay it back quickly enough.
But if you have a family member who offers to lend you money for a remodeling job, it’s one of the best renovation financing options possible. You’ll be able to get the money you need without subjecting yourself to high-interest rates in most cases.
2. Applying for a Home Renovation Loan
If you can’t find a family member willing to float you a loan, or if you just don’t want to take that approach to renovation financing, you can also take out a loan from a lender. There are home improvement loans that are available to those who qualify for them.
A home renovation company like Milan Design & Build should be able to provide you with an accurate estimate for a home remodeling project. You can use this estimate to apply for the home remodeling loan that you need.
3. Taking Out a Home Equity Line of Credit
If you’ve built up some equity in the home that you’re going to be renovating, you might be able to qualify for a home equity line of credit. Also known as a HELOC, it’s a great way to get the cash you need for a home renovation.
You will, however, want to be mindful of which kind of interest rate you’ll be getting on a HELOC. HELOC interest rates are often variable, so they could get to be on the higher side if you aren’t careful.
4. Trying to Obtain a Cash-Out Refinance
There has never been a better time to refinance your house than right now. The interest rates that are available to those looking to refinance are very low.
When you refinance your home, you can also opt to go with a cash-out refinance. It’ll put you in a position to take out some of the equity that you’ve built up in your home so that you can renovate it.
5. Using Credit Cards
Using credit cards to pay for a home renovation is going to be the most expensive option in most cases. But if you’re able to get your hands on a credit card with a very low introductory interest rate, it could be an option.
You’ll want to try working your way through your other options first, though. Credit cards should only be used for renovation financing as a last resort.
Which One of These Renovation Financing Options Would Work Best?
As you’ve seen here, there are lots of ways to finance a home renovation project. It’ll be up to you to decide which renovation financing option is the right one for you.
Whatever you do, you shouldn’t blindly pick one without crunching the numbers on all your options first. Doing this could lead to you spending more than you planned on a home renovation.
Searching for Chicago home remodelers? Call Icon for all of your home remodeling needs. We offer architectural expertise to ensure you get the best possible value and visual appeal from your project.
You can find more financial advice by reading through the other articles posted on our blog.