What Financing Option Is Best for Your Home Improvement Project?

A couple taking a break from home improvement project

Military families understand the desire to make a house into a home quickly, not to mention the desire to redo it in a few years if they aren’t moving into a new house. There are many reasons for a family to decide that it’s time for some home improvement, including changes in family size, preparing to rent or sell, or even just making that kitchen a bit more efficient.

Improving your home can be overwhelming and expensive, but there are several ways to make it easier and more affordable.

Home Improvement Tips and Tricks

Start with a master plan.

Renovations rarely stick to a carefully constructed plan, but this is not a time to be overly casual. Changes in your plan can cause stress and be more expensive. List what you want to do to your house. Prioritize your first project based on the time it’ll require, the cost of the project and the value it’ll bring to your home. When you're done with one project, you can move on to the next when you have the time and the money.

Does this project add value to your home?

When considering your options for home improvement, think about your long-term plan for the house. If you plan to rent or sell within the next 5-10 years, consider focusing on something that will increase the value of your home. Kitchens and bathrooms are a great place to start. You can also think about increasing the square footage by adding a deck or finishing the basement.

Tackle what needs to be done first.

The projects on your list will vary in importance and time required. If something in your home will save money quickly or prevent damage, move this task to the top of your priorities. Likewise, if you have a quick and easy project and can do it yourself, check that off the list first.

Can you do this project on your own?

If you’re handy with tools and have experience with renovations or improvements, you may be able to complete some of these projects yourself. However, your time is valuable, and unless you can give this project your undivided attention, a professional may do it faster, and they won’t lose interest.

When hiring a contractor, you should apply the same research that you do, for example, a dentist, babysitter or therapist. You want someone you trust. Ask your local friends and family whether they have recommendations. Learn what licenses are required in your area and make sure potential contractors have been properly licensed. Also, be sure to check their references. For more information on finding a contractor, check out the Federal Trade Commission’s guide.

Decide where you’ll save and where you’ll splurge.

Renovations and home improvements vary in cost, and personal preferences can make a difference in that cost. Just like when considering brand-name products, decide where you’ll save and where you’ll spend more. Where can you scale back to come in under budget?

For things that are difficult or expensive to replace, such as electrical work or a hot-water heater, spend the money to do it right the first time. If you’re updating drawer pulls or light fixtures, you may spend less on them because they’re more easily replaceable.

Consider your financing options.

Financing home improvement projects is often necessary, especially if you don’t have the cash to pay in full upfront. Fortunately, several options fit your project’s needs and your family’s financial situation.

Credit cards can be useful for small to medium projects or that last-minute trip to the hardware store because you need one more thing. They can also be used in emergencies or appliance purchases, especially if they have cash back or other rewards.

Loans are another option to help cover home improvement expenses. Each kind serves a specific purpose.

  • Personal Expense Loan: Typically used for home-related expenses in the small to medium range, these loans can give you access to funding quickly -- in most cases, on the same day as you apply. Monthly payments are set at a fixed rate.
  • Home Equity Loan: If your project requires a specific amount of money for a one-time project, this is a great option.
  • Home Improvement Loan: Depending on your circumstances, this loan may be ideal for larger-scale planned home repairs, remodeling or upgrading.
  • Home Equity Line of Credit, or HELOC: When your project is likely to have ongoing expenses, a line of credit is a good choice.

Improving your home can be overwhelming, but it’s also exciting and empowering. Financing those home projects doesn’t have to be stressful, too. Using an informed financer can help you make decisions about the right financing products for their home improvement goals.

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