Home renovations can be stressful for many reasons. By affecting your ability to live normally in your home and causing more financial strain on your budget than normal conditions, it is often a relief when everything is completed. If you plan on DIY-ing most of the work, then the stress may only increase.
However, when it comes to thinking of how to cover the costs of your home renovations, you can rest easy. There are many ways of securing the money you need to see your projects through to the end. Depending on your financial situation, some options will suit you better than others.
Let’s look at five great options for home renovation financing that will help you complete your household projects in 2019.
Credit Cards
For small projects where you might only need to cover the cost of some materials, credit cards are a great option for home renovations. Especially if you earn points or discounted rates as a perk of holding your particular credit card, you may even receive some bonuses for using your credit card in this way. Make sure that you do have a plan as to how to pay off this debt, as credit cards often have higher interest rates than other forms of borrowing.
Personal Loans
Personal loans are a great option for any size of a home renovation project. Depending on how much money you need to borrow, you may have to explore both unsecured and secured options for personal loans. The best part about this option, however, is that you can shop around and find the lowest rate possible. Make sure to factor in the interest charges into your renovation budget so that there are no unpleasant surprises when the work is done.
Home Equity Line Of Credit
This secured form of borrowing uses your home as a means of attaining a more reasonable rate on a loan. By combining a line of credit with your mortgage, you can often borrow a great deal of money, usually a percentage of your home’s estimated value. While you will have to pay some interest on this borrowing, you will likely not have to pay a set monthly repayment rate, though you will still need to repay your mortgage on a monthly basis.
Reverse Mortgage
For older home renovation enthusiasts, a reverse mortgage on your home can be a viable option. Through this financial instrument, you can tap into the equity you have already put into paying off your home and receive easy access to financing. However, this option has many downsides. Interest can accumulate quickly and, as a senior, you will have fewer assets to leave to your children.
Cash
Of course, the best option for financing home renovation projects is to pay with cash. Though it takes some discipline to save a sufficient amount of money to pay for home renovations in one fell swoop, this is by far the cheapest way to do it. Cash payments allow you to avoid interest and fees altogether. Once the job is done, you will not have to worry about bills to pay in the following months.
Get The Job Done Right
No matter how you choose to finance your home renovation project this year, make sure that you plan it out properly. Many homeowners find that their projects quickly become overly ambitious and end up costing them much more than they originally expected.
By setting a realistic project budget and sticking to it as closely as possible, you will be able to make the financing methods outlined here work better for you.
