Thinking about a kitchen remodel, but shocked at the pricing? How to: Finance a Kitchen Remodel is here! Did you know that there is financing for larger home renovations? I represent Main Line PA buyers and sellers and often find myself offering consultations on when to renovate and when not to renovate prior to selling. Before I explain the financing options for home renovations, for buyers, this can be a great option if you have good credit, for sellers, if you are thinking of selling in the next 5 years, I highly recommend that you consult a realtor before borrowing to renovate. We rarely see sellers recoup these losses.
Let’s talk financing a renovation! Renovating your kitchen can be expensive, but there are ways to defer costs. First and most obvious is to use your savings. You do not have fantastic ROI on a very expensive remodel, because kitchen tastes amongst buyers varies, but it will save you money in interest. Another is to take out a line of credit. This way you pay interest on only what you borrow and are not limited to a certain amount to be spent. However, a line of credit’s interest rate is often variable, so where we see higher inflation, we may see the interest rates increase. Similarly, a personal loan can have a fixed rate of interest, but must be approved and taken out at once. Personal loans are a great way to finance your kitchen remodel because they come with lower interest rates than credit cards: If you are looking for even lower interest rates and you own your home, you may be able to take out a home equity loan or home equity line of credit (HELOC). HELOC loans use the equity in your home as collateral and typically come with lower interest rates than personal loans or credit cards. Lastly, there are home renovation loans that are specifically designed for home improvement projects, like a kitchen remodel. Be very careful when reviewing terms of conditions when you are borrowing.
Prior to borrowing create your budget, prioritize your spending, and then see what financing makes the most sense. If you need referrals or help, I am just a phone call away and I have resources below and on my website to help with trends as well!
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