A successful kitchen remodel can improve your property value while deepening your satisfaction as a homeowner. The best kitchen remodels will typically improve the functionality of the room by either adding work space or storage space, introducing more efficient appliances, improving the lighting or by making aesthetic improvements. Upgrades of this nature vary in terms of cost, but many major upgrades require homeowners to borrow money and secure financing.
Financing can come from different sources, depending on your needs. The type of financing a homeowner can secure depends on the type of upgrade being performed, the amount that must be borrowed, the homeowner’s credit history and other factors. Many homeowners aren’t aware of all the options available to them. If a loan is necessary, knowing where to look for financing can ensure that you get the right kind of loan for your needs.
Of course, the best way to pay for a remodel is with cash, because paying in cash costs less than borrowing. Homeowners who have the resources on hand to pay for their remodel will save money on interest and therefore enjoy the highest ROI when it comes time to sell their home. Paying in cash is also simpler and takes less time. Homeowners who must secure a loan may spend a lot of time going to different sources, looking for the lowest interest rates and the best repayment options. Paying in cash is fast, easy and therefore optimal.
Some homeowners can save cash for their home kitchen remodel with a little time and smart budgeting. To do this, start by determining the amount that will need to be saved. This is a multi-step process that involves meeting with contractors, exploring the price of materials and forming a list of priority items that must be replaced during the upgrade. We’ve explored this process at length in previous posts.
Once the amount needed has been determined, the homeowner must devise a savings plan that will help the homeowner achieve the goal. Some banks offer special savings plans that help homeowners save for short-term goals like home remodels. To find out what kind of savings plans are available to you, talk to a representative with your bank.
A low-interest credit card is flexible option for homeowners with good credit history. Low-interest cards can be used to pay for materials and can be used to pay contractors that have the ability to process credit card payments. Check with each contractor when obtaining quotes to find out who can accept credit card payments and who cannot.
The real downside to paying for your project with a low-interest card is that most credit cards have a relatively low credit limit, and thus are only useful for smaller-scale home remodeling projects. For a homeowner who is only planning to replace their appliances or perhaps refinish their cabinets, this payment option is realistic.
Borrowing money is the most common way that homeowners pay for their home remodels. Different sources offer different lending options. Some of the most common lenders include:
Establishing a firm kitchen remodel budget is something that homeowners must do around the time that they choose their financing method. The budget for the home remodel must include some key components, namely:
Financing for your remodeling project should happen prior to the start of the project. Homeowners who are seeking to save money and pay cash for their kitchen remodel may need to start saving years in advance, while homeowners who plan to borrow the money should start working to secure their financing a few months in advance of the project.
To secure financing, the homeowner needs to:
To start your budget for your home improvement project, check out ourEverything to Include in your Kitchen Remodel Budget eBook! Have questions about financing your home improvement project? Leave your questions in the comments field below, or contact us at Litchfield Builders. We can get your renovation project under way. With over 25 years in the business, we know how to help homeowners through the remodeling process from start to finish.