If you intend to sell your home in the future, a well-planned kitchen remodel can make your home look new and fresh, and can help to increase its sale value as well. Even if you don’t have plans of putting your house on the market, a kitchen renovation can still give your home a grand facelift. However, completing a kitchen remodel, regardless of how big or small the project is, can be an expensive undertaking. Unfortunately, not everyone is lucky enough to have spare money lying around, and even if the kitchen remodel is expected to provide a good return on investment for you in the future, that still doesn’t resolve the lack of access to finances you’re facing in the present.
The good news is, you’re not alone. Before you get discouraged by the thought of not being able to remodel your kitchen, here are four of your kitchen remodel financing options which could help you get started on your project. Let’s explore which ones might work best for you.
1. Personal Loans
The easiest way you can get access to funds for your home project is through taking out personal loans. You can find personal loans that could provide amounts from $1,000 to $40,000, possibly more depending on your financial circumstances. Numerous lenders will have flexible options to repay your loan in a timeframe that suits you. If you want to find the best deal with good interest rates, don’t settle for the first lender you find, take your time and look at other lenders so you can compare; many lenders offer better interest rates for customers with good credit scores.
Some lenders will let you choose between unsecured or secured loan. If you opt for a secured loan, they’ll ask for collateral from you, which must be something of good value, such as your car, art collections, or stocks, but keep in mind that failing to make the payments before the agreed deadline means the lender will have to take the collateral, and they’ll have the right to sell it.
2. Credit Cards
If your kitchen remodel project is on the smaller side, you could finance it using credit cards.
If you’re looking to finance using a credit card, consider applying for a card with a promotional zero percent interest rate, and make sure you pay it off in full before the promotional period ends, to avoid paying large interest fees. An additional tip for people who are planning to proceed with this method, it’s best to pay more than the minimum monthly payment needed for the card. Failure to pay within the promised timeframe, and you could find yourself paying high interest on your balance.
3. Home Equity Loan
When you’re financing a larger, more elaborate kitchen remodel, one option you could look at is a home equity loan. This type of loan allows you to borrow cash until up to eighty percent of your home’s equity, this means you could have access to a hefty amount of money which would finance most massive kitchen remodels. However, there are some factors that can affect the amount you may be able to access, such as your current debt and your monthly income.
Home equity loans generally have a fixed interest rate, making it easier for you to predict how much your monthly payment will be, however one danger of opting for this financing avenue is that it’s your home that’s on the line and used as collateral. If case you fail to make payments on time, or not pay at all, the lender may have the right to take your home to recoup their losses.
4. Home Equity Line of Credit (HELOC)
HELOCs’ have a similar purpose and structure as a home equity loan, but they are not precisely the same. If you’re approved for a HELOC, the lender will permit you to borrow a certain amount of money, of which you can pay off and use again without having to go through another application process. After you’ve paid off a portion of your loan, you can borrow it again if you’d like to use it to remodel another part of your home, or even for something else. In this way, a HELOC has a process that’s quite similar to your credit card. Keep in mind, just like the home equity loan, your house is still on the line as collateral, so if you neglect to make your payments, your home could be repossessed by the lender.
Key Takeaways
Before you start planning your kitchen designs and layout, it’s best to plan first how you’ll be financing your kitchen remodel.
Speak to a financial professional today and go through these financing options to see which ones might help you achieve your dream kitchen faster. After you’ve settled on a financing method, you can start working on your budget and go ahead with your kitchen remodeling project, knowing that you have the funds to create your perfect space.
