How to Affordably Finance Remodeling Projects

How to Affordably Finance Remodeling Projects

Posted on May 6, 2016

It’s National Home Improvement month and homeowners across the country are planning to tackle remodeling projects. However, too often the last thing that homeowners focus on is how to affordably pay for work that goes beyond a can of paint or a few swings of a hammer. Since remodeling costs can run from the hundreds of dollars easily into the thousands, it’s appropriate to take time and consider the best financing and money-saving options.

Buying on credit

For do-it-yourself projects, labor isn’t a relevant cost but materials are. Before pulling out a credit card, check to see if there are discounts available or cash back when purchasing items from certain stores. Does a credit card from the store that you’re buying materials offer any ‘same as cash’ incentives such as no-interest if paid in full within a set amount of time? This may be a good option if you’re disciplined enough to pay off the debt in the allotted time frame. If not, interest charges on these types of store cards could easily top 20 percent annually.

For qualified homeowners, Self-Help Enterprises administers several deferred payment loan programs for essential health and safety repairs that typically include roofing, plumbing, electrical, heating/cooling, foundation, windows, and handicap accessible modifications. More information about this program is available here.

Borrow the tools you need

Most people have a hammer in the house, but not everyone owns all of the tools necessary for more than a minor repair. A great option is borrowing a tool from a neighbor. A survey from NeighborWorks America last summer found that 86 percent of people believe that a neighbor would lend them a tool or help out in other ways.

Be sure you know how to operate the tools and take all necessary safety precautions.

Put that tax refund back into your home

Two-thirds of taxpayers expect to receive a refund this year. According to the Internal Revenue Service, roughly one in seven taxpayers wait until the final day. Whether you’ve waited until the last minute or already have a refund in hand, a way to use the cash is to help pay for a remodeling project.

Even if your refund isn’t near the average of just above $3,000, combining any refund received with other funds is a way to lower any interest costs that come with borrowing to pay for a home remodeling project.

So this month, or whenever you choose to tackle a home remodeling project, keep an eye on the financial side of things. It will make living with the finished project that much sweeter if lingering costs aren’t interfering with enjoying the fruits of all that labor.