In the modern age, it’s almost impossible for homeowners to avoid the infamous kitchen remodel.
People want to fix up their kitchens for any number of reasons. Whether you’re looking to increase your home’s value before you move, or you just can’t stand those ugly pea green walls and linoleum floor anymore, an update is never a bad idea.
In fact, the kitchen is where people spend most of their time. It’s where families gather to make meals or simply be together. So, you deserve the chance to make this room more useful and visually appealing.
The issue comes down to cost, though. Construction is an expensive business, whether you’re looking at kitchen remodels or something bigger like house additions. Today, you could spend anywhere from $12,000 to $35,000 or beyond for a kitchen remodel.
If you’re like many people and don’t exactly have that money upfront, you’ll likely be turning to financing to pay for your remodel.
But what are your options, and which of those is right for you? At Homeowner Funding, we’re all about helping homeowners in the Northeastern United States to renovate their homes as they see fit.
Here’s how to finance your kitchen remodel.
- Get a Personal Loan
One direct way to get financing for your kitchen remodel is by obtaining a personal loan. Just like they sound, personal loans consist of money that banks, credit unions, and other financial institutions loan to individuals to finance large projects.
One benefit of personal loans is that they tend to offer lower interest rates than credit cards would. Additionally, many lenders don’t use anything other than your credit history to approve you, so you can theoretically get approved in about a week.
A word of caution: different lenders will offer you different terms. Don’t jump on your first loan offer. Shop around just as you would for a mortgage lender. It’s the wise thing to do because you could end up saving thousands on interest.
- Get a Home Equity Loan
Another relatively simple financing option is a home equity loan. These are definitely worth looking into because the lender will provide you with the borrowed money in one lump sum. Then, you’ll repay the amount over time.
The upshots of home equity loans are that they tend to offer longer repayment periods and lower interest rates than personal loans. That’s because your home serves as the collateral for the loan.
If you are borrowing this money to finance a remodel, which in itself will increase your home’s value, then lenders feel fairly confident that you will repay it on time. Don’t skip the home equity loan option when looking at kitchen remodel financing.
- Get a Cash-Out Refinance
This one you may not have heard of before, but it’s a no-less-viable option.
A cash-out refinance works like this. First, you need to have built up enough equity in your home. That’s because you’re going to be doing some borrowing on top of your existing mortgage.
You’ll get the final approximate cost of your kitchen remodel and then borrow that from your lender. You will get the financing as cash to spend on your renovations. Then, the lender will tack on that amount to your mortgage, and you’ll owe that much more on your house.
So if you owed $50,000 on your home at the time of your cash-out refinance, and you borrowed $20,000 for the remodel, you’d get that cash immediately but then owe a total of $70,000 on the house.
- Use Credit Cards
Another option for financing your kitchen remodel is by using credit cards, but this is more for lower-cost renovations that you can fit on one or two cards.
Now, obviously, if you could pay for this project all at once, you wouldn’t need a financing option, so you can expect to owe interest on your monthly credit card debt payments.
One pro tip for doing this is to apply for a new credit card that offers a promotional period of 0% interest over 12 or 18 months. If you can pay off your remodel in the allotted time, you can avoid paying high interest rates.
Doing this may call for you to pay more than the monthly minimum, but if you plan correctly, you can ultimately save yourself thousands.
- Go with Homeowner Funding
The final option we’re presenting here encompasses all the loan options we offer at Homeowner Funding. We are an Owens Corning preferred contractor, meaning we are licensed and approved to install Owens Corning building products in your home.
A kitchen remodel may call for numerous components, including new insulation and roofing. Not only are we ready and willing to fund your project through our own programs, but we will offer you the highest-quality installation services.
All you have to do is call us up and tell us about your project. Homeowner Funding has been helping homeowners just like you to realize their remodeling dreams since 2005.
Contact us today to get started on your own renovations!