Are you planning a home improvement project? If you are like most of us, when you find out how much it is going to cost, you’ll certainly get sticker shock! According to Lifehacker.com, the average cost of a kitchen remodel is over $50,000, and the average cost of a bathroom remodel is over $16,000. So, how are you going to pay for it?
Fortunately, there are some ways that you can finance your home improvement project whether you need a few hundred or several thousand dollars. Here are five of the most popular:
0% Credit Card
If you have a small home improvement project, such as one under $15,000, consider using a 0% credit card. When you do this, you usually have 12 to 18 months to pay it off before interest kicks in. So, it’s very important that you pay it off before you have to pay interest. This is usually a more affordable option since you don’t have to pay any extra.
Refinance Your Mortgage
If you have a larger home improvement project to plan for, you should consider refinancing your mortgage. With this scenario, you are replacing your current mortgage with a new one, and while doing that, you are also taking out a home equity loan. Since you usually have 30 years, or sometimes more, to pay off the loan, this is an attractive option.
Apply for a Personal Loan
If you don’t qualify for a refinancing, or you don’t want to do it, you can also consider a personal loan. The drawback to these is that they usually have higher rates than refinancing and you don’t have 30 years to pay them off. However, you don’t have to pay on the loan for decades, and you get your loan quite quickly.
You also might consider getting a government loan. These loans are available through the Department of Housing and Urban Development. There are some qualifications that you might have to meet depending on the type of loan you are looking for, but it is probably worth it to check these out. There are also government incentives that you should look into, too, such as getting cash back when you install solar panels.
Do you absolutely have to do your home improvement project this year? If not, you might want to consider waiting 12 to 18 months and use that time to save cash. This is, by far, the cheapest option since you won’t have to pay interest, and it keeps you out of debt. If you can manage to save $500 a month for 18 months in a savings account with interest, you would have close to $10,000 at the end of that time.
As you can see, there are several ways to finance your next home improvement project. The next step is to figure out which option is right for you based on your personal needs and preferences.