Financing Home Upgrades and Remodeling

Home improvement financing can be difficult, but with plenty of information, and a little creativity, you can have your home improvement without breaking the bank.

In today's difficult financial circumstances home improvement plans are sometimes put on the back burner, but it could turn out to be the best opportunity to make the improvements you want and need, add value to your home which will really pay off as the economy improves, and even get some of the best interest rates in years while doing so.

Planing home improvement financing

Planning is the key to any project. The more time you spend in preparation and planing any project, the better your chance of succeeding. This is doubly so in home improvement. Planning both your project, and the means by which it will be financed well before the first saw is deployed, or the first nail driven will give you a huge advantage when it comes to time and resources. Planning Home Improvement Financing

Save for the improvement

If the home improvement you have in mind is not an urgent need, and if it is small enough, you can practice delayed gratification and save the money yourself. Put a predetermined amount aside each pay period, either in a "cookie jar", or set up your bank account to withdraw the amount electronically.  

Credit cards

If the job and cost are small, say, just a few hundred dollars, using a credit card might make sense, especially as an emergency repair means. Some home improvement stores offer credit cards for projects, and some do so without interest, as long as the balance is paid of before the predetermined due date. Shop these offers before you commit. Some have stipulations which may make the agreement difficult to live with if anything goes wrong. Make sure you get the best deal, and that you can live with the consequences if something should go wrong.

Home equity loans

How much equity do you have in your home? Home equity loans are a solid way to make your homes value work toward increasing it's future value.

Re Finance

If the job is large enough, and the economy in the right moon, it is possible to completely re finance in many cases. The circumstances best suited to this solution are when interest rates are getting lower, and housing costs are rising. The current financial situation seems to be the opposite.

Borrowing from yourself

Borrowing from yourself. If you have a 401 K, or a savings account with reserves, paying yourself back may be easier to justify in your mind than paying back a loan company or paying off credit card debt.

Borrowing against value whole life policy

If you have a whole life insurance policy with a good deal of value,  borrowing against it can be a good means of procuring the money needed to get the job done.

Borrowing from your investment portfolio

Borrowing from stocks, bonds, and other investments is another means of borrowing from yourself.

Government loans or government sponsored loans

Title 1 FHA, VA, and other government loans are available under some circumstances. Each entity has it's own regulations.These links should help you to get started if you want to research this route:

FHA Title 1

HUD

VA

Bartering for home improvements or reducing costs by adding your labor

It is possible in some circumstances to cut the cost by doing part of the work yourself, or by trading services with the contractor.

Credit unions

One of the best sources for borrowing is local credit unions. Shopping them for loans is highly encouraged.

Some pitfalls to avoid:

Contractors

Borrowing from contractors, that is, hiring a contractor and making payments to him, can sometimes be done, but there are a few problems. We suggest doing a lot of homework, and looking at many options before employing this  method. The same is true for loan companies.

Loan Companies

Loan companies have a place in our economy, but home improvement financing is probably not the best place to use them.