Options for Financing a Home Improvement Project


Many homeowners have big ideas and dreams about home improvement projects.  Perhaps you have finally decided to move forward with a creating your chef’s kitchen or a spa-like master bathroom, or even upgrading your home’s siding or roof.  An important factor to consider before you begin the work or order any materials is how the project will be financed.

According to an article in RealtorMag published by realtor.com, “One-third of affluent homeowners—those who earn at least $100,000 a year—plan to use credit cards to pay for home renovation projects…”, according to a survey conducted by a division of Sun Trust Banks.  This option may be a perfect solution for a homeowner who has the means to pay off the balance as soon as it is due, while earning reward points offered by their credit card company.  However, many homeowners may not be able to pay off a large sum within that time frame and would, therefore, begin to be charged possibly double digit interest on their balance.

A home equity line of credit may be a wiser decision for some homeowner’s needing to finance their renovations.  Often, the interest rates are significantly lower and possibly tax-deductible.  Homeowners with home equity could consider a HELOC or even a cash-out refinance, “where borrowers refinance for more than what they owe on the property and then take the difference out in cash.” These options can come with refinance fees or closing costs which would need to be factored into any comparisons.   Nevertheless, it is advisable to fully investigate all financing options to ensure you are not paying more than you need to complete your home improvement project.

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Photo Credit:  Mateusz Kapciak
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What to Consider When Deciding on a Home Renovation


It’s the time of the year when many homeowners consider tackling home improvement projects.  It can be exciting to think about designing a dream kitchen or bathroom.  However, before taking the plunge and spending thousands of dollars, its worth reviewing which home improvement projects offer the best return on your investment.22342993781_c39181aa68_o

A list of home improvement project’s cost as well as the return on investment has been compiled by Remodeling magazine.  Topping the list of renovation trends with the highest ROI are energy efficiency upgrades such as adding fiberglass attic insulation.  It has an average ROI of 107%.

Additionally, an up and coming trend is updating a home to include “universal design”.  According to an article published by Realtor.com, written by Judy Dutton, universal design… “ensures that a home’s features can be used just as easily by the elderly and disabled as anyone else. That means things like grip bars in showers, lever-style doorknobs, and wider, wheelchair-friendly doors. A universally designed bathroom, for instance, reaps a respectable 68.4% ROI.”

These types of upgrades to a home aren’t as glamorous or exciting as the updates to kitchens and bathrooms that are seen on home improvement shows and magazines.  Unfortunately, these types of improvements do not offer the same ROI on average.  In fact, many home improvement projects, such as bathroom remodel, master suite addition and back yard decks and patios, have a return on investment around 65%.

When determining whether a home improvement project is a wise investment to make or one that a homeowner should take a pass on, Dutton suggests considering how long you plan to stay in the home.  When homeowners plan to sell the home in less than five years, its advised to take the return investment into account.  If you plan on staying longer, however, it may be worth the cost because it will be an upgrade you plan on enjoying in your home for a while.

To see the entire article and the list of remodeling projects cost and ROI, click here.





Photo Credit: Highmark Builders

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