Home > Mortgages > Ways to Pay for Home Renovations

Comments 0 Comments

Home renovations are a big deal. Many people renovate to update their homes and increase property values. There are several ways you can pay for home renovations. There are secured home improvement loans or unsecured personal loans. Or you can use your savings if you have a lot of money saved up. If your renovations are smaller, you may consider placing the charge on your credit card.

Get a Home Improvement Loan

If you do not have enough savings to fund your renovation project, you can consider a personal home improvement loan. This option allows you to get money without leveraging your house. If you opt for an unsecured personal loan, you’ll likely get more than you can on a credit card. It’s important not to borrow more than you need. It’s also important you know how much your monthly payments are.

Using Your Savings for Home Improvements

If you’ve saved over the years, it could be a smart decision to use your savings to avoid monthly payments and interest.

If you intend to make use of money from an investment you made, consider seeking advice from a financial adviser so you can avoid withdrawal penalties. It is a good idea to set money aside for unplanned projects if you can afford to.

Using a Credit Card

In some cases, you may decide to use a credit card to fund your home renovations. Getting a credit card that has a 0% interest introductory period could be the best choice you make for funding your home renovations. This gives you some time to make payments on the card without paying interest.

You’ll also find that there are numerous other benefits to using a credit card for your home improvement projects. A lot of credit cards have rewards programs, so you can earn cash back, miles, or points. If you spend thousands of dollars and are able to make the payments, this could be a great opportunity to earn lots of rewards!

It’s also easy to keep track of your expenses. You can review your statements at any time to see how much you’re spending. This can help you make sure you’re staying on budget.

Keep Your Renovations Within a Budget

Because the cost of most home improvement plans can increase quickly, it’s important to plan your budget before you go shopping. Here are some ways to help you budget:

Research

You can begin by researching the cost of materials you need for your projects. Also, if you’re not the DIY type of person, then you also need to research how much it will take to hire a contractor.

Does it Add Value to Your House?

A good way to think about the cost of your home renovation is to think about how much it could possibly add to your home’s value. Simple singular additions like towel rails or sinks may not make as much difference. On the other hand, renovating the kitchen can increase the property of your value.

Include a Buffer with Your Budget

Usually, home renovations cost more than you think. Including a buffer into your budget will provide you with money if you face unexpected expenses. When creating your budget, it’s a good idea to do your research on how much everything will cost.

Seek the Right Builders and Craftsmen

Getting an accurate quote can help you keep an eye on renovation costs. You can reach out to friends and family or do research online to find a reputable contractor. You can also give your contractor your budget upfront to see if you can afford them and the work that they’ll do.

Bottom Line

Home renovations can be expensive, but luckily, there are several ways to pay for them. Loans, savings, and credit cards can all be used.

It’s also important to set a budget that you can stick to, and to do your research. Consider whether the renovations will raise your home’s value.

Lastly, if you use a loan or a credit card, remember to check your credit score. A higher credit score will help you get lower interest rates and can even help with getting a higher credit limit. Check your credit score today with Credit.com. We offer a free credit score that are updated every 14 days.

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Certain credit cards and other financial products mentioned in this and other sponsored content on Credit.com are Partners with Credit.com. Credit.com receives compensation if our users apply for and ultimately sign up for any financial products or cards offered.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.



Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team