House renovation is a big decision for many home owners as it involves large sums of money in relation to purchasing material as well as for paying labor. Thus, it requires considerable amount of planning especially in relation to finding the necessary money. This article will help those who want to know how to find money to renovate a house through various financial means as well as by saving on the expenses related to renovation.
One of the best and cost effective methods of financing a renovation is to make use of one’s own funds from fixed deposits, savings that are reaching maturity or through other means of savings. However, this can deplete one’s savings considerably especially if the homeowners do not have plenty of savings up their sleeve. Therefore, although it is the best form of financing house renovation, many would not be able to afford such an expense without the help from other financial sources.
Home equity loans
Home equity loans could be the next best thing if one finds it difficult to fund the renovation by his or her own funds. The relatively low interest rate and the ability to obtain large sums of money are two important advantages of such loans although the bank requires the loan to be taken against the equity of the house to be renovated. However, experts caution that taking home equity loans could deplete the amount received by the homeowner when he or she decides to sell the house for whatever reason. At the same time, receiving large sums of money for renovations would mean that there is a risk of spending money for unnecessary upgrades or to deviate from the initial renovation plan, which makes the renovation more expensive than what was expected.
Credit cards could also be a source of money for renovating a house, although one should be aware about higher interest rates and the added costs that may be incurred upon obtaining such funds. However, possible interest free periods and some of the lucrative benefits gained through credit cards when such large amounts of funds are obtained could make it a worthwhile deal. At the same time, the ability to obtain enough money within a short period is another advantage of using credit cards as against any other means of funding.
Do it yourself
Obtaining the help of family and friends or practicing ‘do it yourself’ could also be cheap ways of meeting up with the renovation costs although they may not be feasible options when the renovation is of large scale and it requires expertise beyond the capacity of the homeowner, family members or helpful friends. However, for small-scale projects and renovations which require only a basic knowledge and skill, this could save a considerable amount of money. Although the homeowner may still have to pay for the materials and for professional services during the renovation.
Apart from these methods of obtaining money for house renovations, one could also save a considerable amount of money if they chose to buy material themselves or else take an effort to compare between contractors and choose the most cost effective one. In combination, these actions may reduce the cost of home renovation and therefore could reduce the effort required in finding money for renovating a house.