Home renovation can be exciting yet daunting for even the most experienced homeowners. While performing necessary repairs or customising your home to suit your style and preference is undoubtedly exciting, the challenging part involves financing. Finding creative ways to fund your home remodelling project with home renovations costing between £1,000 and £34,000 is understandable. Fortunately, this article offers innovative ways to finance your home renovation, especially with the present financial strain of the pandemic. Ready to get started?

Creative Ways To Finance Your Home Renovation

Mortgage Refinancing

Refinancing is an excellent way to save money every month for your home renovations. You can refinance your home renovation project at a lower interest rate or over an extended period per your present interest rate. This means you will make lower mortgage payments every month. Mortgage refinancing can also help you save up until you get started with your renovation. However, cash-out refinancing is an even faster way to refinance your next major home project. Cash-out refinancing will be treated later in this article.
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Home Equity Line Of Credit

It wouldn't be advisable to refinance when you have already completed a mortgage payment or have one with a low-interest rate. A home equity line of credit (HELOC) offers a better equity option to fund your home renovation without refinancing. Like your credit cards, HELOC has a set limit on how much you can borrow, although it offers a considerably lower rate than credit cards since they are secured against your home. HELOC is usually adjustable and allows fixed-rate advance alternatives for those who prefer rates that won't change.  
HELOC comes with some essential requirements - You need to have enough home equity to access a loan on your house.

Try Crowdsourcing

If the available traditional options don't seem like a good fit to you, you may want to consider the good old bank to help finance your home remodelling – Your family. If your parents have the funds to support your home improvement needs, why not? Whether they will fund your renovation as a loan or gift, you can save lots considerably if you tap into it. However, don't limit your banking hopes to only your parents since some members of your extended family and perhaps friends can be helpful to complete your project. If you plan on tying the knot soon, then that's your chance of securing family funds as gifts instead of some registry items.
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Home Remodel Or Repair Loans

Banks, credit unions, and digital lending platforms offer unsecured personal loans for your home renovation. You won't have to use your house as collateral to access home improvement loans since they are unsecured. Yet, your credit score determines your qualification and interest rate. You can quickly access home improvement loans from organisations such as Buddy Loans and agree on shorter payment schedules for more convenience.

For this reason, they are considered ideal for small or midsized home renovations like window replacement or bathroom remodelling. It is additionally essential to note that home renovation loans usually attract high-interest rates since they are unsecured.

Find Creative Ways To Earn More Cash

While this wouldn't sound ideal for some people, adding some side gig to your 9 to 5 is excellent for saving up on any project. This is even more particular when you are undertaking a home renovation. Costs can build up so quickly, and it helps to have some additional source of revenue. You can consider renting that extra space in your home to garner some funds. If you have enough space for a parking lot, you can get some bucks for renting out, or if possible, you can give out your empty storage to a trusted neighbour as storage units. You may likewise consider renting your car and commuting to work if possible, at least until you save up enough to cover your remodelling.
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Credit Cards

Credit cards can be great for financing your minor home renovations, for example, new closet installation or bathroom vanity upgrade. Credit cards can be advantageous for those little costs since some are interest-free for the first few months. This means you can finance some projects without having to worry about interest payments. Additionally, many credit cards offer some excellent rewards, which means the more you spend on your renovation, the more cashback you earn. However, these rewards are limited to only cards with cashback offers.

Cash Out Refinancing

As mentioned earlier in this article, cash-out refinancing can offer new, significant loans and new interest rates to replace your current mortgage. You can then save up the extra dollars between your old mortgage and a new loan to cash out and refinance your renovation project. It helps if you carefully consider the drawbacks of refinancing before diving into it. There are fees like appraisal, taxes, origination fees, and other costs you will have to pay for. You will also require more time to pay off your loan unless your mortgage refinancing is for the short term. Refinancing is generally good if you can access a lower interest rate than what you are paying currently.
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Be Strategic With Your Savings Plan

Although this is old school, it remains one of the common ways people fund their home renovation. It is excellent if you can eliminate some unnecessary costs and save toward your home improvement. While this is a better option than going for loans that may attract some high interest rates, you'll save much quicker than you think if you are disciplined with your spending. To get started, take a closer look at your current expenses, and you'll notice those avoidable expenses. It may also be time to cut back on your automatic monthly subscriptions on music and TV apps. You can live without them.

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Irrespective of your financial strengths, you should consider your budget, the extent of your home renovation, and return on investment to determine whether you need to carry out your renovation. However, if you are good to proceed, the above tips should help you fund your home renovation project.

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