Is there a home renovation you’ve been dreaming of for years? Maybe it’s a chef’s kitchen or a relaxing outdoor living room. While you may be itching to start your renovation project, your wallet is probably a little less keen.
Home improvements cost money, but new ways to pay provide more payment flexibility than ever. Learn how to pay for home renovations with one of these six options:
Wondering how to finance a remodel? The best way to pay for home improvements is the one that’s tailored to your needs and abilities. With six different methods of home improvement financing, you can pick the payment option that’s right for you.
Cash is a good way to pay for home improvements because you can purchase your renovation projects without worrying about interest. However, if you’re not already sitting on a mountain of cash, it can be hard to come up with the amount needed to cover a project’s upfront cost.
- Credit Cards
If you don’t have cash on hand, credit cards may be a good option for home improvement financing. If you can pay off your balance every month, you may not have to pay any interest. An added bonus? Rack up airline miles and points with your renovation purchases—that’s a double-win! Unfortunately, you’ll likely only be able to fund smaller renovations on your card, and many credit companies will charge you a hefty fee for a cash advance.
- Home Improvement Loans
Another possible option is a home improvement loan from a traditional bank, lending broker, or unsecured financing solution that specializes in home improvement financing. This type of loan typically comes at a fixed rate, and approval is generally based on credit score. Home improvement financing options like these make almost every renovation possible, big or small. This lets you install the upgrades you need, when you need them.
- Home Equity Line of Credit
Some homeowners choose to open a home equity line of credit, known as a HELOC, which is a revolving line of credit you can use to borrow against the equity in your home. With a HELOC, you’ll make no monthly payments until you begin writing checks against your account. HELOCs generally come with adjustable interest rates, so your payments may vary from month to month. However, equity lines typically are only good for around 10 years, and if you don’t make payments, you could lose your home to the lender.
- PACE Financing
Property Assessed Clean Energy (PACE) financing helps homeowners purchase energy efficient or renewable energy home improvements. This type of financing is paid back along with your property tax bill.
Homeowners’ eligibility for HERO (Renovate America’s PACE product) is based on factors including their equity in the home, household income, debt obligations, and the products they want to finance, and these criteria may vary by jurisdiction. Residential properties with up to four units may be eligible. With HERO financing, you also get added peace of mind, because we only work with contractors who have agreed not to be paid until the homeowner has signed off that the project has been completed to their satisfaction.
- Rebates and Tax Incentives
If the home improvement project you want saves energy or conserves water, you might qualify for a tax rebate or incentive. Local utility companies may offer rebates and discounts on a variety of home improvement projects. The right energy efficient projects can also save you on federal taxes; ENERGY STAR’s website highlights ways you can save on appliances, lighting, heaters, and provides information on tax credits for solar systems. You should always consult a tax professional to see if you are elibible for specific tax benefits before starting your home improvement project.