Many things about home renovation are flexible. You can always change wall colors or nudge a wall another six inches. But one thing is certain: you need money. You need to have a concrete budget for your project in order for you to push through with your plan because not a single nail gets hammered or wire run or foundation poured without money. 


So how can you afford a remodel project? Do you have enough savings for it? How far will your fund go with the remodeling plan you have? Well, stick to this blog and you can learn more how you can manage to pay a renovation project.


So here are the most popular ways of funding your home remodel, from the most desirable to least desirable.


Cash and Liquid Assets

The most readily available money you can have: savings, checking, CDs and savings bonds near maturity. Cash is absolutely the cleanest, freest way to pay for your project, as you are not beholden to a lender.


Cash and liquid assets are the best way to fund your projects—but only if you have plenty to spare. Some retirement accounts allow you to borrow a certain percentage against them.


Sweat Equity

Got any willing friends and family? For the price of a six-pack and a takeout pizza, they may help you put some sweat equity into your renovation project. If a learning curve is involved, it still may be cheaper and faster to hire workers.


Some sweat equity is inevitable and even can be fun, but do not stretch it if you are not sure of your abilities.


Zero-Interest Home Remodeling Loans


Home Improvement Program (or “HIP”) loans from your county are not exactly free renovation loans, but they do come close. Counties and other municipalities will subsidize some or all of the interest on your remodeling loan in order to help preserve local housing stock.


In one scenario involving a five-year, $50,000 8% loan that is subsidized 3% through HIP, your total interest savings would be $4,215.


Property taxes still must be paid by you, including the elevated taxes that come as a result of your home improvement.


Substantial red-tape associated with securing these subsidies, including monitoring of the project, time window for completion, and narrow definition of home-related projects (for example, swimming pools, hot tubs, decks, and other luxury-type items are not financed).


Home Equity Loan or Line of Credit

A home equity loan is a classic way to finance home renovations. Take out a loan against the equity in your own house.


Large amounts of money may be available for large projects like additions. But if you keep depleting your equity, you reduce the sum you will receive when you eventually sell the house. The large amounts available with this loan encourage spending on things unrelated to the renovation.


Target this loan only for large projects, such as additions, pools, driveways, and siding.


Credit Cards

A credit card that you pay off at the end of each month. Or a zero-interest that you don’t have to pay off for six months or a year. Some homeowners pay off one zero-interest card with yet another zero-interest card, thereby creating a permanent, but risky, no-interest loan.