What Is the Best Way to Fund a Home Renovation?

Whether you are kick-starting your journey as an aspiring homeowner or have stayed in your home for a couple of decades, the thought of renovating it to suit personal styles and preferences can be both compelling and daunting. The impressive parts go without say, but the daunting thing revolves around cash. 

Recent research by HomeAdvisor survey indicates that 70% of homeowners wish to renovate their homes but have no cash to fund the project. If you fall in that category, this article will benefit you greatly.

Here we seek to highlight the various ways to fund home renovation projects.

What Is the Best Way to Fund a Home Renovation?

Top 8 Ways to Fund Home Renovations

1. Home Repair Loans

When looking to renovate your home but have no enough cash in your pocket, consider applying for a home repair loan. This type of loan is not hard to find as several lenders are waiting for your applications. They include credit unions, your banks, various online lenders, etc.

The most exciting thing with home renovation loans is that they are unsecured, meaning you won’t be required to use your home as a security to qualify. Instead, your qualification and interest rates primarily depend on your credit score. If you have a good score, funds will be available almost instantly.

2. Credit Cards

When looking to make minor renovations in your home, e.g., upgrading toilets, installing new sinks, etc., you can finance the project using a credit card. This option will benefit you the most, especially if your credit card is interest-free. Additionally, you will stand chances to win great rewards in the form of cashback when you fund your projects using credit cards.

3. Home Equity Loans

If you are looking to accomplish major repairs in your home, applying for home equity loans could be the best funding option to pursue. This sort of secured loans UK comes in handy, especially when your home remodeling technician wants upfront payment.

With this loan type, the lender gives the entire amount you needed at once, thereby enabling meet any upfront cost. When turning to this funding option, be aware that the interest can be high. However, they remain fixed, meaning you incur the same amount every month.

4. Your Savings Can Help

As a rule of thumb, you should be setting aside some cash in your savings accounts to cover you when you get into financial constraints. Your home can require renovations when you least expect, for example, in unfortunate events where fire damage or a strong wind blows off the roof.

Assuming you don’t qualify for other funding options and have no insurance cover, you can withdraw a portion of your savings and have reconstruction done.

Experts advise you to set aside at least 1% -3% of your house value in your saving accounts to cater for home renovation.

5. Cash-out Refinancing

Cash-out refinancing lets you take a new larger mortgage while you still have an existing one. Then, when you apply for a larger second mortgage, your lender will work out the difference between your new and old mortgage – and you can withdraw the balance to use it in fixing your home.

The good thing with cash-out refinancing is that it snags significantly lower interest rates than your existing mortgage.


HELOC (abbreviation for Home Equity Line of Credit) is somewhat similar to a home equity loan – both of them offer you the convenience of tapping into homes’ equity and require approximately 20% equity to access.

However, the two works differently. Unlike a home equity loan, HELOC doesn’t offer you the lump sum amount needed at once. Instead, you receive a portion of the amount before the renovation and the balance after the upgrades. That way, avoid misusing money meant for renovation; however, it may not be ideal for high upfront costs.

7. Personal Loans

Should other options for funding home renovations fail to work, you can go for personal loans and accomplish the task. Acquiring personal loans is easier than ever, considering many banks, credit unions, and online lenders available.

When taking a personal loan for home renovations, it’s wise to compare the interest rates offered by various lenders and go where the best deals lie.

It’s worth noting that your credit score will determine the amount you can get and the interest rates. In this case, those with good credit scores stand better chances to qualify for more significant amounts with low interests.

8. Use Cash at Hand

No matter what your financial state is, we can agree on one thing – you hate debts. After all, they add to your burden and cause you more financial struggles if you lose your job. Fortunately, you can evade them if you have some cash in your pocket.

Using the cash out of pocket to meet your renovation needs will help avoid debts and interests and help retain your savings.

The Bottom Line

It doesn’t matter whether you plan to carry out minor home repairs like re-installing the roof or significant upgrades like installing an in-ground pool; you will need reliable sources of funds.  Unfortunately, sometimes it is hard to discover such funding sources – and this explains why most people wishing to upgrade their homes fail to manage. Hopefully, this article will give you more options to look into for your home renovation upgrade.

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About Dequiana Jackson

Dequiana Jackson, Founder of Inspired Marketing, Inc., helps overachieving women entrepreneurs conquer limiting beliefs and create marketing plans that win. This includes one-on-one marketing plan development, digital product creation, web design and content marketing. Dequiana is the author of Know Your Business: How to Attract Ideal Clients & Sell More and runs the award-winning blog, Entrepreneur-Resources.net.

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