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Home Decor Help: Paying for Your Remodeling Project

Home Decor Help: Paying for Your Remodeling Project

by Samantha Taylor

I can give advice on decorating your kitchen until we’re both blue in the face but the fact is if you don’t have the money to finance a remodel, there’s not much to talk about. Financing a remodel can linger around throughout the process unless you face it head on in the beginning. It’s the most difficult subject to tackle so why not get the worst part over with? I recommend getting an estimate from two to three resources even if you’re pre    tty certain of whom you want to use. I suggest doing this because when there’s a bump in the road (which there usually is), you can look back and have confidence in trusting the person you picked. Otherwise you may be wondering — if I had picked someone else, would this same problem occur? By doing some homework on several resources, you can test them not only on their budget but also on their work ethic. At the end of the day, you should pick your trusted recommendations, but at least you know he’s in the same ballpark as everyone else. Getting an estimate is important to do before consulting a bank for a loan. 

Secondly, we need to prioritize. Make a list of all the components that really mean something to you. If you’re remodeling a kitchen, this could include building a pantry, getting a dishwasher, installing an island etc. After your list is complete, make sure your most important items are at the top of that list and start detaching your feelings from any “want” that exceeds #6 on the list, You may not get everything you want. Sometimes we become more reasonable with our expectations when we see them written in black & white as well. Giving this list to your contractor or designer is imperative to getting an accurate budget. Your designer or contractor is like your doctor. They should know everything. Spare no detail.

Now that you’ve done your research, you know what you want and who is going to give it to you. You even have a magic number in mind. But where’s the money coming from? Cash is king but not all of us are blessed with a few thousand dollars lying around. So here are some options for us regular folk:


1. Home Equity Loan

 You will receive all of the renovation funds upfront & repay in monthly installments over the course of 15-30 years, like a traditional mortgage. This type of loan typically has a fixed interest rate and the same tax benefits as your conventional mortgage loan. 


2. Home Equity Line of Credit

This type of loan works like a credit card; you’re given a ceiling amount to spend by the bank and can’t exceed this amount. The benefits are that you’re only paying interest on the amount you’ve charged to the card, not the whole loan amount, making it perfect for long terms projects. Unfortunately, the interest rate will vary based on the market at the time of the purchase. 


3. FHA 203K Mortgage

 With this style loan, you can refinance your home & wrap all the home improvement cost into one monthly installment. It means your monthly mortgage payment will increase but this increase includes the cost of your remodel. 


4. Cash is King

Ultimately; the best way to fund your remodel is to pay cash which can be easier attained by setting aside your tax refund and those two extra paychecks each year. Good Luck! 


There are some financial bonuses to remodeling a kitchen or bathroom as well. Usually when you’re purchasing a large fixture like appliances or a bath tub, you’ll receive a rebate of some kind, which is not to be expected but is a delightful surprise! You can hope to get back $200-$400 in rebates when buying new appliances, Unfortunately this will come 12 weeks after your purchase, making it hard to use on other remodel expenses but its green money nonetheless. 

The important thing is to remember that A LOT of homeowners remodel and not everyone has thousands of dollars in cash under the mattress. So keep your mind open to all possibilities, consult with a designer and a bank simultaneously to come up with the right plan for your renovation. 

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