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Finance Options For Your Home Renovation Project

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coins spilled from jar

coins spilled from jar

Undergoing home renovations can be quite a costly endeavor. In 2020, Americans spent nearly $420 billion  on home improvements alone. Going by that statistic, it's safe to assume that home renovations are going to be expensive. Something such as roof repairs, for example, will cost more than most homeowners have on hand. For this reason, many need a little extra financial help to take on renovations. Here are some of the most popular options for financing home repairs.

Credit Cards

Homeowners that are seeking simple upgrades can benefit from using credit cards. Cards that are interest-free for the first few months are even better to use. Simple repairs such as closet upgrades will only cost a few thousand. A diligent homeowner can pay off the entire renovation without incurring any interest. Certain credit cards offer perks and reward programs as well. By paying off renovations quickly, homeowners can earn more cashback. It's worth researching different credit card companies to learn about their reward programs. There are some risks associated with using credit cards. They're best used for repairs that cost no more than a few thousand. For more expensive renovations, there are better options out there.


Cash-Out Refinance

A popular option to finance renovations is to use a cash-out refinance. It works by replacing a homeowners' current mortgage with a larger loan with a new interest rate. The homeowner can pocket the difference from the original loan, giving them more capital for repairs. It's crucial to note that extended loans will take longer to pay off. Cash-out refinances also require appraisals, origination fees, taxes, and other costs. It's imperative to consider the risks before committing to a cash-out refinance.



Loans are among the most prevalent choices for homeowners financing renovations. In particular, the USDA offers single-family housing repair loans and grants. It's the Section 504 Home Repair Program, and it allows homeowners to undergo renovations. Applicants must be the homeowner that currently occupies the house. They also must be able to obtain affordable credit elsewhere. Homeowners also need to have a family income below 50% of the median income in their area. But perhaps one of the greatest advantages is that a USDA loan requires zero down payment.


Government Loans

The government offers a HUD Title 1 Property Improvement Loan. For those that qualify, they can borrow up to $25,000 without any home equity. That's an excellent option for new homeowners that need crucial upgrades. All renovations must contribute to the livability of the home, and not all upgrades may qualify. 

These 4 options are all candid ways to finance essential home upgrades. For homeowners looking to sell without much capital for much-needed repairs, these methods can allow them to find the extra money they need. While there are other ways to fund renovations out there, these are the most straightforward and popular.