Introduction
Home improvement projects can be expensive and often require financing. For many homeowners, building up your savings will be the least expensive option. Among homeowners who postponed or canceled a home improvement, repair, or maintenance project in 2023, an average of 61% did so because of budget or financial concerns, according to the Home Improvement Research Institute’s Monthly Homeowner Activities and Sentiments Tracker.
Financing Options
- Personal Loans
Pros: Unsecured, fast access to funds.
Cons: Higher interest rates; shorter repayment terms.
Best For: Small to medium projects.
- Home Equity Loans
Pros: Lower interest rates; fixed repayment terms.
Cons: Requires home equity; risk of foreclosure.
Best For: Major renovations.
- Home Equity Lines of Credit (HELOCs)
Pros: Flexible borrowing; interest-only payments during draw period.
Cons: Variable interest rates; potential for overspending.
Best For: Ongoing or phased projects.
- Cash-Out Refinancing
Pros: Potentially lower mortgage rates; access to large sums.
Cons: Extends mortgage term; closing costs.
Best For: Extensive home improvements.
- Credit Cards (0% APR Offers)
Pros: Interest-free period; rewards on purchases.
Cons: High interest after promotional period; potential for debt accumulation.
Best For: Small projects with quick repayment.
- Government Assistance Programs
Pros: Lower interest rates; flexible eligibility.
Cons: Limited availability; specific project requirements.
Best For: Eligible low-income homeowners.