Finance Options for your Home Improvement 

Hello World!  Welcome Friends!  When it comes to home improvement, knowing what areas of your home to renovate and improve is the easy bit, but dealing with the financial implications and deciding on how to finance it can be the hard bit.  Home improvements can increase the value of your property, and are also a cheaper alternative compared to moving out of your existing home into another property.  However, regardless of your reasons for the improvement and what you seek to get out of it, such improvements come at a cost.

According to the Remodeling Futures Program at Harvard University, spending on renovations in 2018 will rise to an all time high, and will exceed $340 billion, representing a 7% increase on 2017 spending levels, and will remain high going into 2019. The first step in deciding how to fund the works is to know how much your project will cost. It will be helpful to gather all the cost information and create a budget – in addition to helping you make decisions about how to pay for it, the budget will also have the benefit of helping to keep costs under control. 

Using your savings to fund home improvements 

Depending on the total cost of the improvement works and affordability, you can use your savings to pay for them, and won’t have to pay any interest. If you don’t currently have the amount of money required in savings, but can work towards saving for it, you should consider putting some money into such a savings pot each month. A previous survey by SunTrust Bank revealed that about 59% of Americans had used savings to pay for home improvements, although an increasing number were also using loans and credit to fund these works. 

Borrowing to pay for home improvement 

If you cannot afford to use your savings to pay for the works, you can borrow money to pay for it. There is evidence that most Americans pay for home improvements using borrowings, and this method of financing for such works is set to rise.  Again, depending on your budget and the level of funding required, you can use different forms of borrowing, such as credit cards, overdrafts, personal loans, as well as tapping into the equity of your property through different forms of remortgaging. According to a report by Black Knight Inc., $5.4 trillion of equity remains to be tapped by American home owners, and Moody Analytics estimates that $97.8 billion will be borrowed by Americans in 2018 for home improvements and innovations, using home equity lines of credit. 

Achieving your home improvement goals will come at a cost.  Whatever method of finance you use to pay for them, it is important that you have a good understanding of the cost of the overall project, and ensure that the benefits, such as improvement in value outweigh the costs of the project.

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