Tuesday 18th October 2022

Financing Your Home Renovation: What You Need to Know

Financing Your Home Renovation: What You Need to Know

If you’re like most people, you probably don’t have a few hundred thousand dollars lying around to fund your home renovation. That’s okay! There are plenty of financing options available to make the process easy and stress-free. In this post, we discuss some of the best ways to finance your renovation project. We’ll also touch on some of the things you need to know before getting started. So whether you’re just starting to think about renovating your home or you’ve already started planning, make sure to read this article!

When it comes to financing your home renovation, there are a few different options available. You can use your home equity, get a personal loan, or use a credit card. Each option has its own pros and cons, so it’s important to figure out which one is right for you and your renovation project.

Home Equity

If you have equity in your home, you can take out a loan, refinance your existing loan or utilise your redraw account to finance your renovation. Home loans typically have lower interest rates than other types of loans, so they’re a good option if you’re looking to save on interest. However, it requires that you have either paid off enough of your existing home loan to have equity available or that the property value is higher than what you paid for it.

Personal Loan

Another option is to take out a personal loan. Personal loans usually have higher interest rates than home loans, but they don’t require that you have equity in your home. And, if you default on the loan, your credit score will take a hit but your home won’t be at risk.

Credit Card

You can also use a credit card to finance your renovation. This is probably the fastest and easiest way to get started, but it’s also the most expensive. That’s because credit cards typically have high interest rates. So, if you’re planning on carrying a balance on your credit card, you could end up paying a lot in interest.

Before you choose a financing option, it’s important to compare interest rates and terms. That way, you can figure out which one is right for you and your renovation project.

Once you’ve decided how you’re going to finance your renovation, it’s time to start planning! Make sure to get multiple estimates from contractors and compare prices. And, don’t forget to factor in the cost of materials, permits, and other incidentals. By following these tips, you can make sure your renovation project is a success!