- Personal Loans
Unsecured and flexible—but typically come with higher interest and shorter repayment terms. May be easier to qualify for if your credit is solid.
- HELOCs (Home Equity Line of Credit)
Flexible revolving credit with variable interest.
Can offer tax deductibility when used for home improvements.
Risks: interest rate fluctuations, high closing costs, and your home is collateral.
- Home Equity Loans
Lump-sum loans with fixed rates, often lower than personal loans.
Typically come with closing costs and use your home as collateral.
- Cash-Out Refinance
Replaces your mortgage with a larger one to access equity.
Useful if current interest rates are favorable—but you’ll restart a mortgage term and pay closing costs.
- Renovation-Specific Mortgage Products
These roll renovation costs into your mortgage—based on post-renovation value:
FHA 203(k) Loans:
Streamlined (up to $35,000) or full version (over $35,000).
Offers low down payment (~3.5%) and combines purchase + renovation into one loan.
Fannie Mae HomeStyle Renovation Loan:
Flexible, covers many types of renovations—including pools.
One monthly payment, up to 75% of as-completed value, requires licensed contractors.
Freddie Mac CHOICERenovation Loan:
Similar to HomeStyle, but also allows multi-unit and investment properties.
Lower down payments and credit requirements.
- Contractor/Point-of-Sale Financing
Quick, often unsecured loans offered via your contractor.
Convenient—but may have higher rates and pressure to commit quickly. Always compare with other offers.
- Credit Cards
Convenient and may come with 0% intro rates—ideal for small upgrades if you can pay off quickly.
Risks include high interest after the promo period and potentially limited credit.
- Cash/Savings
Cheapest option with no interest or debt—but may leave you financially vulnerable if used entirely.
- Alternative/Hybrid Options
Crowdfunding, peer-to-peer lending, or shared appreciation mortgages—less common, each with unique pros/cons.