3 Ways to Pay for Your Home Remodel Project

a glass container with a pile of coffee beans in it

Home remodeling projects are exciting. That’s true if you just purchased a fixer-upper, and it’s equally true if you’ve decided to freshen up the house you’ve been living in for a decade. But these projects are also both time-consuming and costly. In 2018, more homeowners were looking at the pricey housing market and deciding it made more sense to renovate then pack up and leave. There’s also been a shortage of labor and an increase in the price of materials. That means most of us can’t just use a chunk of our check to pay for that new bathroom or roof. But you do have options, and here are three of the best ones.

Savings Account

If you have savings, you should consider using them on that home project. Yet 58 percent of Americans report having less than $1,000 in savings. Some Americans don’t have anything. They’re too busy trying to survive to worry about putting aside money for the future.

On the plus side, 22 percent of Americans report having between $1,000 and $9,999 in their savings account. A lot of projects can be completed in that price range, though it’s best not to take out any more than you have to. And if you’re among the 21 percent who have more than $10,000 stashed away, then you’re really doing well. But be careful.

You don’t want to burn through all your savings on a new living room in January, only to get into a car accident in March that leaves you with a ton of medical bills. If possible, always consider the worst-case scenario when you’re deciding how much to take out of savings. If you have a long list of projects, try to prioritize what matters most. Maybe you need a new bathroom for both plumbing and aesthetic reasons, while the new bay windows can wait a little while longer. Prioritize necessary repairs first. If your roof is unsafe, call roof repair Raleigh before you call anyone else on your list.

A Home Loan

Yes, you can take out a home loan for more than just your mortgage. If your house needs a lot of work and savings aren’t an option, try looking into a home loan. Make sure, though, it’s one that provides favorable terms rather than one that’s predatory. 

Home equity loans for home improvement projects have plenty of pros and cons. On the plus side, you can get a lower interest rate than with other types of loans, and you can also take out more money than with personal loans. But there are downsides, as well. The biggest one is that you’re both reducing your equity and risking foreclosure. No one who wants to build a new bathroom ends up thinking that the bathroom will cost them their entire home, but it can happen if you’re not careful. Even if you are careful, you might hit a patch of bad luck financially and be unable to repay it.

Unclaimed Money

The idea of having unclaimed money just sitting around waiting for you feels too good to be true for a lot of people. They figure they have better odds of hitting the lottery than striking it rich via unclaimed funds. But the reality is that searching online to see if you have unclaimed money is easier than ever. You aren’t going to lose anything, and you might just gain some money that helps you renovate your home.

Where does all this unclaimed money come from? It can originate in a variety of places. You might have overpaid on your taxes and be due a refund check that somehow slipped through the cracks. Sure, it’s unlikely that a long-lost relative left you a massive inheritance that you never knew about, but it’s more likely that, for instance, an insurance claim you forgot about finally went through. You’ll never know until you take a look.

Home remodeling jobs can be expensive, but there are ways to make it work. By following this guide, you’ll have increased chances of completing your tasks with money to spare.