4 Ways to Finance Home Improvement Projects

Home improvement is part of your responsibility as a homeowner. It’s your property and you will need to invest in its upkeep and maintenance. More than that, you also need to figure out ways to add value to your home. Opting for the right projects will help you realize these goals, but one thing often gets in the way of completing them: financing.

No matter how small or major it is, a home improvement project will require a considerable amount of money. You may not have enough in the bank to fund these, but at least numerous financing options should suit your needs. Here are a few to keep in mind as you plan your project:

Go for a personal loan

Minor projects might seem less costly than, say, adding a patio to your property. However, things like a simple shower renovation may cost you more than a hundred bucks. With a personal loan, you could at least finance the project in case you don’t have enough to foot the bill. There are loan providers out there that offer personal financing for different types of projects.

For instance, if you’re planning to add a solar generation system to your roof, check out Cooperativa de Credito en San Antonio for personal loans you can use for this green investment. Whatever the case, make sure you compare different loan products and pick the one that aligns with the size of the project, your goals, and your financial situation.

Get a home equity line of credit

The biggest benefit of home ownership is the equity you build throughout the years. With a HELOC, you simply apply for a second mortgage based on how much your home is currently worth and how much equity you have. Equity, in this sense, is the percentage of the house you own outright. You can use this value to take out a loan up to a borrowable threshold and use the amount to finance any major home improvement project, such as an above-ground pool. For this, you just need to make sure you have gained enough equity and maintained a healthy credit record to qualify for a HELOC.

Tap into your 401(k)

Your retirement savings are supposed to be kept until your retirement, but if it has built enough value over the years, you could take a portion of the amount to pay for necessary expenses. For sure, your 401(k) can be a good source of funding. The only downside to this option is the fact that not all projects you’re using your 401(k) for could help you build equity. Before you do, ask for expert advice on projects that are sure to generate a hefty return.

Check if a cash-out refinance is right

Getting a cash-out refinance might be tempting to some while others think it’s impractical. But thinking in the long-term, you will find this option to be more suited towards financing a major project. This involves consolidating your existing home loan into a larger one with more favorable repayment terms and a lower interest rate. The trade-off to this is the fact that you’ll be using your home as collateral and foreclosure is certain if you default on your loan. It might not be the best option, but get advice from your financial advisor just in case.


The right upgrades for your home require the right kind of funding, so consider these options as you make plans for a cozier and longer-lasting home.