Home remodelling shows have fanned the fire of DIY homeowners who want to turn their drab home into something worthy of a spectacular reveal. The one thing that keeps most people from realizing their dreams is that they don’t feel like they have the funds for it. Whether it’s a new luxury kitchen or an updated bathroom calling your name, here are the easiest ways to fund your next renovation project.
The best way to fund a home renovation is in cash. If you have repairs or updates that can wait, then save as much cash as you can. This ensures you can afford the luxury kitchen renovation you’ve always dreamed of without paying for it later. Cash puts you in a better position to negotiate with vendors and contractors as well. If you plan to subcontract out different parts of the renovation project, you’ll save a lot more than if you contract out the whole thing. Of course if it’s something that needs repair right away, that’s not always possible to save for, so here are some additional funding options.
Home Equity Loan
If you’ve been in your home for a while, you might have some equity built up that you can borrow against. This equity becomes the collateral for taking out a loan to make critical or fun updates and repairs to your house. Some banks offer a line of credit style home equity loan called a HELOC where you can borrow up to the amount of the equity in your house. This means that you can borrow as you go instead of taking out a lump sum home equity loan.
One of the advantages of this type of loan is that the interest rates are usually pretty low if you qualify. Traditional home equity loans allow you to take out up to the equity amount in a lump sum. There are loan origination fees to be aware of when you leverage your home equity, so make sure you account for those costs.
You’ll want to get your credit in order if you plan to go this route. It’s important not to make any large purchases in the months leading up to getting the home equity loan. This includes car loans and if you’re wondering, does refinancing a car hurt your credit, the answer is not necessarily. It doesn’t always hurt your credit, it just means you’ll have more debt for your lender to consider.
This one is only useful if you haven’t purchased the home yet. A 203K loan can be used to make updates and repairs to a house in need of a little love. These are excellent options for the homebuyer who isn’t scared of what they might find when they peel back the layers of their latest home purchase. One of the restrictions with this kind of loan is that they won’t allow you to do the repairs yourself. They must be done by licensed professionals including contractors.
Some banks will allow personal loans with no collateral for up to a few thousand dollars. If you have a smaller repair like updating a half-bath or replacing deck boards, this can be a useful option. Additionally, you can leverage your credit cards for the updates as well. It’s important to remember that the interest rates will likely be higher if you go this route versus other lending options. Some home improvement stores offer zero interest rate credit cards for new cards for up to a certain amount of time. This is another good way to get help funding your renovation without needing to pay interest.
Selling your extra belongings online or in person through a yard sale can make you big money. While it depends on what kind of things you have to sell, some people make thousands of dollars just by selling their stuff on the weekends. Additionally, you can pick up other people’s free stuff and then fix it up to re-sell on different platforms. Use Facebook marketplace and apps like OfferUp to get your high-quality used items in front of more people and to sell for better prices.
Get a Side Gig
Uber, Lyft, Instacart, DoorDash, GrubHub, and Shipt are all app-based side gig options where you can make decent money. They each have different requirements, but if you have 10 extra hours a week, you could easily rake in an extra $200 or more. This adds up quickly and can easily help you fund your home renovation projects. You can get other side gigs as a consultant or doing creative jobs. You can make things to sell online, you can resell books and movies on Amazon and so much more. Getting a side gig is easier than ever and an excellent way to work toward your big renovation goals.