4 Creative Ways To Fund Your Future Home Renovations

You’ve been looking at that kitchen for a while, picturing a wall knocked out and a sleek mahogany island in the middle. Additionally, the backyard is asking for a pool, the house could probably use another room, and the driveway needs an overhaul. What do all of these things have in common? Well, they improve the value of the property.

But they also cost money. Here are a few creative and effective ways to fund your future home renovations!

#1: Refinance, Refinance, Refinance!

Refinancing your home is a quick and effective way to bring cash to the table. Depending on the current economy and real estate market, you might be able to acquire a loan with a lower interest rate (and possibly a longer term).

In effect, this will lower your mortgage payment. But how does this help you fund future renovations?

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  • Put the Difference Towards Renovations – Do not change your budget. Treat your initial mortgage payment as an amount you still need to set aside monthly. Now that the mortgage is lower, put the difference into a renovations fund. Depending on your refinancing structure, this might allow you to pay for renovations in a span of months.
  • Cash-Out Refinance – Consider taking out a new loan that’s higher than the amount you owe. Once your initial mortgage is paid off, you have the immediate capital to put towards renovations. This is also wise if you want to sell the home at a higher price. The renovations, then, become an investment that will raise the home’s value.

Whether you’re in Los Angeles, Las Vegas, or any other state, know that your refinancing options will vary. It’s a big decision to consider, but one that can help you execute the renovations you’ve been dreaming of.

#2: Reverse Mortgage

Hailing everyone that’s ready to kick back on a lazy chair and retire in a newly remodeled home, have you considered a reverse mortgage? If you’re over the age of 62, a reverse mortgage is essentially the equivalent of you selling the equity you have in your loan back to the bank. For instance, if you’re in The Copper State, you could take out an Arizona reverse mortgage, then use the loan to pay for a renovation.

Additionally, you only have to pay the loan back once you’ve moved out of the house. So, if you don’t plan on moving, take out a reverse mortgage and install that Arizona pool you’ve been dreaming of.

Note: This is not a smart option should you plan on moving or selling the home.

#3: Use A Credit Card for Small Projects

When it comes to managing personal or business finances, you never want to spend money you don’t have. Credit card debt can spiral out of control… and quickly. However, if you plan on renovating the home to increase its value prior to selling, you can effectively treat the credit card as a loan you’re going to pay back.

Should you have money coming in and want to get the ball rolling, even better.


  • Paying for Materials with a Credit Card – While a contractor might not take payment in credit, you can offer to pay for the materials with credit. This could mitigate one of the expenses that would otherwise require upfront cash.
  • Use a Credit Card if the Renovations are Small – If your renovations have a low dollar amount, then consider using a credit card. If you know that you’ll be able to pay the card before it accrues interest, then this can be a quick and easy option to “finance” the renovation.

As a rule of thumb, be careful when using a credit card. Make sure you’re absolutely positive that you will be able to pay back the amount in full.

#4: HELOC, The Second Mortgage

A HELOC, or a home equity line of credit, is a credit pool you secure against the available equity of the home. If your home appreciated over the years, then this is can be a decent way to fund a home renovation. Additionally, HELOCs tend to have lower interest rates, meaning that it’s a better option than, say, a credit card.

Note: If you owe more than what your home is valued at, you’re not going to qualify for a HELOC. In that circumstance, it’s paramount that you pay down the principal prior to considering renovations.

Renovate Your Property the Right Way

Renovating your property should be cause for great excitement, not great anxiety. By ensuring that the renovation aligns with your finances and thinking creatively, there’s no reason why you won’t be able to find an option that allows you to renovate!

Soon, you’ll have your feet raised in your new backyard terrace, eating a bowl of delicious fruit, satisfied beyond measure with your new home improvement(s).