Does your kitchen desperately need a makeover? Or perhaps you need to convert a bedroom into a home office?
Whether you’re building new kitchen cabinets or doing a total makeover of your bathroom, one thing is for sure: you need to set a budget. While most residential and commercial construction companies offer affordable rates, you need to find a way to finance your project, preferably in advance.
A leader in commercial construction in Utah shares some solutions that you can try.
1. Paying cash
Of course, the easiest way to pay for a home renovation project is to use cash. If you have extra savings lying around or can take out a portion of your emergency fund, use this money to avoid paying for the interest, fees, and charges of a loan. Keep in mind that doing this will probably put you at financial risk in case there is an emergency, so make sure you don’t deplete your cash reserves entirely for the project.
2. Selling assets
Do you have assets that you can easily liquidate? If so, that is another great option to fund your home renovation project. Assets that can be easily liquidated include mutual funds, stock shares, and bonds.
3. Home improvement loans
Check with your county or municipality if you can qualify for a Home Improvement Program (HIP). This type of program will subsidize part or all of the interest on your renovation loan, which makes the interest essentially free. However, HIPs can only cater to remodeling loans at a maximum of $25,000-50,000.
4. Zero or low-interest credit card
For small to medium-sized renovation projects, using a zero-interest or low-interest credit card can make funding easy for you. If you don’t have one yet, look for banks that offer such cards at a promotional rate. In this way, you can save money and make purchases much easier.
5. Home equity loan
A home equity loan is a common way of funding medium to large-scale renovation or addition projects. In this type of loan, you borrow against the equity on your house while enjoying low interest and a sizeable loanable amount. You can use this loan to do major remodeling or make significant additions like a pool, garage, or driveway.
6. Personal or unsecured loans
Getting an unsecured or personal loan for medium-sized projects (e.g. adding a bathroom, remodeling a bedroom, roof repair) may be the best option if you $15,000 to $50,000 for expenses. Look for unsecured loans from banks, lenders, or credit unions and shop for the best interest rates. Although you may not find rock bottom rates, you put yourself at a lower risk because you don’t need collateral.
7. Secured loan
If you need $50,000 or more for your home renovation project, a secured loan is the best way to go. You can use this loan to renovate derelict homes or make large additions such as guest houses or extensions. But since you will be borrowing a huge amount of money, lenders will require collateral.
Are you planning to renovate or remodel your house? Keep these options in mind when looking for ways to get the funds for your project.