Funding a Home Renovation Project

In a house remodeling, wall color and placement, room size and other renovations may be changed. But in every renovation project, one thing is always present: financing. Nothing can be started without funds; nothing will be done without an adequate budget. Where can you get the money to support your project?

Here are some sources of home renovation financing:

  • Ready money and assets convertible to cash
  • These are money sources readily available to the homeowner like cash, liquid assets, savings, checks, savings bonds nearing maturity.


    1. Interest, fee, and charge free
    2. Not dependent to anyone.


    1. Exhaust reserves.
    2. Not everyone has enough cash on hand.

    Conclusion: Ready money and assets convertible to cash are for those who have sufficient funds.

  • Your swipe card
  • A credit card is issued by a bank or business that allows somebody to purchase goods and services and pay for them later, often with interest. Some are paid monthly; others offer zero-interest that are payable in 6 months or a year.


    1. Money is accessible anytime.
    2. With large home renovation-related purchases, the card holder can accumulate reward points.


    1. Risk of high interests and fees
    2. Gives a false sense of security: a feeling of having more money that you actually have.

    Conclusion: A complicated home renovation financing that requires maintenance and proper attention.

  • Loan with home as collateral
  • The classic home renovation funding: home equity loan.


    1. Perfect in financing large projects like room additions.
    2. More affordable interest rates than personal loans and swipe cards.


    1. Too much use of a home’s equity depletes the amount to be received by the time the house is actually sold.
    2. The large amount available encourages spending more than what is just necessary.

    Conclusion: Home equity loans are perfect for big projects only.

  • Equity from contributed labor
  • Sweat equity requires the help of family and friends. They will help in the home renovation just for a good time or a good day’s meal.


    1. Free labor
    2. There is 100% control over the project.


    1. Materials still needs payment
    2. Hiring home renovation professionals work more efficiently.

    Conclusion: Sweat equity is good is as good as bonding but requires some skill in home renovation.

There are a lot of ways on how to finance a home remodeling project. It is up to you on which is more profitable, safe and accessible.

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