5 Creative Ways To Fund Your Home Renovations

creative ways to fund home renovations how to finance house improvement projects

If every homeowner could have their way with sprucing up their homes, I’m pretty sure almost everyone would customize their homes to fit their style and preferences. But since wishes aren’t horses, not every beggar could ride. 

But for the few who are willing to go the extra mile to add that element of glitz to their homes, I'm happy to announce to you that we've got just about the right set of tips for you on how you can get the money you need to achieve your dream home. 

We call them the five creative ways to fund home renovations. Read on to find out about them. 

But please note that not all the options we’ve listed on this page might be right for you because while they all have the ability to help you achieve your home renovations, some of them might require that you put your home on the line as collateral. Which means that if push ever comes to shove and you cannot repay the money you’ve borrowed, your home might be claimed by the creditor. 

Mortgage Refinancing 

For homeowners that are still paying back their home mortgages, refinancing their homes can be a great way to secure the funding they need to spruce up their property. 

Depending on your current interest rate, you can apply for a mortgage refinance with a lowered interest rate or longer loan term, which would lower your monthly mortgage payment, while also giving you the money you need to achieve your renovations. 

But if you’re lucky to have enough equity on your home at the time you want to apply for a mortgage refinancing, you can apply for a cash-out refinance outright. 

With a cash-out refinance, not only will you get the money you need to renovate your home in cash, but you’ll also get enough funds to settle your original home loan. 

Go The Route Of HELOC (Home Equity Line Of Credit) 

If you’ve refinanced your mortgage in the past or have already paid off your home mortgage, refinancing may not be an option for you to use to renovate or remodel your home anymore. 

But not to worry, there is another option for you to tap into, which is called the HELOC. A HELOC is an option to tap into your home equity to pay for a home renovation without refinancing. Much like a credit card, a HELOC has a set limit you can borrow against. But unlike a credit card, HELOCs come with a much-reduced interest rate, since the loan is secured by your home. 

Apply For A Home Equity Loan 

A home equity loan is another wonderful option that is worth looking at if you’re looking for money to fund your home renovation. Unlike a HELOC, which is a line of credit that you can borrow against as needed, this type of loan allows you to take out all the money at once. 

Typically, most lenders allow homeowners to borrow between 75% - 90% of their home equity. While this is the common trend, there are other deterministic factors that come in handy, too, such as home's appraised value, credit history, type of loan, and lots more. 

Although most home equity loans are secured as second mortgages (that is, in addition to your first mortgage), you can still secure them even if you don’t have any existing mortgage. 

Credit Cards 

Since you don’t necessarily have to tell your card issuer what you intend to use the money for, you can always tap into your credit cards to finance your renovations. Although credit cards might appear like a tricky choice for financing, you can still get the best out of it by shopping for the best card providers and cards that offer you the best perks in the long run. 

Since credit cards are designed for borrowing a lump sum at once while paying back in installments, using them for home renovations can be a great option if there are no other alternatives. 

But be careful when using credit cards because they have a long history of leading people into debt. As such, you’re strongly advised to opt for cards that are well-suited to your financial situation so that you won’t end up looking for ways to deal with debt collectors

Personal Loans 

Personal loans are a great alternative to using your home’s equity or credit cards for financing your home renovations. The fact that this type of financing option avails you the need to put your home on the line as collateral also makes it a wonderful alternative to the options mentioned so far. 

Interest rates are usually higher with personal loans than with home equity financing. There is also a shorter time frame to repay the money, about five to seven years. The shorter window could mean your monthly payments are larger than they’d be with other loan options. 


With so many financing options available to choose from – including home equity line of credit, cash-out refinance, credit cards or personal loans – homeowners are strongly advised to only go for options that suit their financial situation. 

Remember, as much as a creditor might be happy to lend you money to fund your home renovations, they have no problem sending bailiffs after you, the moment you default on the agreement you have with them.

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