Remodeling your home is an exciting project. Whether you’re updating a room or undergoing a complete renovation, a remodel gives you the opportunity to make your home exactly how you’ve always dreamed. And remodels of any scale or scope can revitalize your living space, increase the value of your home, and help you maximize your home’s potential.
But there’s one catch: home remodeling isn’t cheap. According to HomeAdvisor, the average cost of a remodel is $46,653¹. Even remodeling one room isn’t cheap – the average cost of a kitchen remodel totals $25,000². It can seem impossible to remodel even a small room in your home with costs like these.
Andrew Angelov / ShutterstockYet it is possible. Home renovations can be done on a budget. But if your budget is tight, you need to know that you could increase your available funds by thousands of dollars. With that new budget, you could finally start the remodel you’ve always wanted.
Get Between $35,000 and $200,000 for Improvements
How are homeowners finding the tens of thousands of dollars they need to remodel their homes? The answer is simple: home equity loans.
A home equity loan can make your remodel a reality. It can provide the cash you need to begin renovations of any kind. And you can put your home’s equity, or value, to work for you.
When you take out a home equity loan, you’re essentially taking out a second mortgage. You can get a home equity loan only once your home has built up enough value. The difference between your home’s value and your remaining mortgage balance is available for you to use as equity.
For example, if you have $225,000 left to pay on your mortgage and your home is valued at $300,000, you have $75,000 you can borrow through a home equity loan³.
Through home equity loans like the Discover Home Equity Loan, homeowners can borrow between $35,000 and $200,000⁴. And you can use that money for home remodels, home improvements, and home additions. Some people even use them to make their homes more energy efficient.
There are benefits to home equity loans too. Generally, The Balance reports, home equity loans are easier to qualify for – and the interest rate remains fixed for the lifetime of the loan⁵. Additionally, you’ll be able to get a lump sum of money as soon as you take out the loan. According to Discover, you can also deduct 100 percent of your loan’s interest, get zero origination fees, and need no cash down at closing⁶.
So, if you’re hoping for the financial freedom to begin a remodel, look in your home’s equity. The value you’ve built up over years of home ownership could give you the funding you need.
How to Start Your Remodel
A home equity loan can provide the funding you need to turn your home into the comfortable, stylish living space you’ve always wanted. But before you can begin knocking down walls and picking out paint colors, you’ll need to do some careful research.
Here are the steps you should take before you begin a remodel.
Search for and Hire a Contractor
The first step you need to take – after getting your finances in order – is finding a contractor. Unless you’re an expert in home renovations, you’ll need someone who can manage the construction, permits, and on-the-job workers throughout the project.
Search online for reputable, well-reviewed and well-rated contractors in your area. Then, reach out to your favorite contractors for an estimate. Talk with them about your wants, needs, and concerns. Ask questions and get firm pricing. Then, you can choose a contractor who’s capable, known for quality work, and reliable – and within your budget.
Create a “Must Do” List
As home remodels stretch on and budgets are used, it can be incredibly tempting to cut or skimp on different projects. However, you can avoid this. Before you sign any contracts, create a list of all of the things you’d like in your home remodel.
Then, narrow that list down to items that are “musts”, or “must dos.” These will be the highest priority items for your contractor. From there, as money and time permits, your contractor can work their way down to less critical items for the job.
Shop Around for Ways to Save
Often, the biggest expenses and surprises happen when you’re stressed out. To avoid overspending during your remodel, you’ll want to shop for savings before construction begins.
Search online to find the lowest prices on items you’ll need. You can compare prices when you’re choosing everything from flooring to countertops to paint to furniture and fixtures. You can also search for lower-priced alternatives, vet quality, and determine which products offer the best value.
Budget Carefully
Search online to get estimates for the remodeling project you’ll be doing. Is it recommended that you reserve some money for surprise expenses? How much will you need if all goes according to plan? Budgeting will ensure you take out a home equity loan for the right amount of money.
Once you’ve done your homework, secured a home equity loan, and chosen a contractor, you’ll be ready to start your remodel. Remember, plans can change once a remodeling project begins – that’s why it’s so important to do your research beforehand to prepare for any changes or unexpected surprises.