Financing a Home Renovation

Before searching for home financing options, it’s important that you set a budget.  Once the expenses start adding up it can be hard to stop if you didn’t tell yourself before what your ceiling will be.  With the average kitchen renovation costing upwards of 50-60,000, it is likely that you will need financial assistance in the form of a loan.  Here are a few of your options:

Home Equity Line of Credit (HELOC)
- Low-interest, variable rate
- Uses your home as collateral by borrowing a percentage of your home equity
- Hard to get, but the best choice if you have home equity
o Home values have plummeted in recent years.  Only people who put a substantial down payment or have owned their home for a long time qualify.
- Process can take a while, and usually requires you to pay for a home inspection
- Often the best rate available

financingContractor Loan
- Borrow directly from your contractor
- Check to make sure rates are competitive, sometimes contractors get kickbacks from lending agency
- Convenient

Government Solar Incentive Programs
- Tax credits if you use eco-friendly materials/products
- Up to $1,500 credit for using Energy Star appliances, and even bigger credits for solar energy systems
- State programs offer additional benefits

Personal Loan
- Compared to credit cards, personal loans have a lower, fixed interest rate
- Check online for offers, just be careful and make sure the business is legitimate

Title 1 Home Improvement Loans
- Government provides private lenders with insurance to provide loans for up to 25k for home improvements for terms up to 20 years
- These loans can be used for anything except luxury improvements like hot tubs
- Interest rates are generally between 10-14%, which is often half of what private lenders charge

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