Bathroom remodels are a popular way for homeowners to revamp their homes. While bathroom remodels do have a high return on investment, the expenses associated with this type of renovation can be incredibly high. If you’re preparing for a bathroom remodel, it’s important to decide how you’ll pay for it. While loans and credit cards are an option, you may be better off using your savings.
Financing Your Bathroom Remodel
Not sure which option for financing your bathroom remodel is best? Read on as we discuss the different methods for funding your bathroom renovation.
1. Remodel with Your Savings
One of the best ways to fund a bathroom remodel is with your savings. ⅓ of homeowners wait until they build up their savings to remodel their bathrooms. While some choose to cover all the costs of their remodel out of pocket, some pay portion of the renovation costs in cash and finance the rest with loans and credit cards.
Using your savings to cover your bathroom remodel Houston can save you serious money in the long run. For this reason, experts recommend waiting until you can save up enough to pay for a portion of your renovation in cash. Unless you’re experiencing an emergency, waiting to use your savings will help you save more by avoiding accruing unnecessary interest using loans or credit cards.
2. HELOC and Home Equity Loans
While many people choose to pay out of pocket for their bathroom remodels, many homeowners turn to other financing options like loans. Two popular renovation financing options are HELOC (home equity lines of credit) and home equity loans. As these financing options leverage your home’s value, this lending option is a better choice as a bathroom remodel Houston will add to your home’s value and increase your equity.
To qualify for these loans, borrowers are often required to have 15 – 20% equity. If you are a new homeowner, this may not be the right option for you. However, if you qualify, these home equity loans and HELOC have lower interest rates, making them a more cost-effective financing option for homeowners that are confident they can afford their monthly payments.
3. Personal Loans
Personal loans are another method to consider when financing your bathroom remodel. It isn’t uncommon for homeowners to take out personal loans to quickly remodel their homes as these loans are often available in just a few days. Moreover, personal loans are easier to acquire with many lenders offering instant borrowing online, regardless of one’s credit score.
Even though personal loans are a popular home improvement financing option, your credit score does play a role in the rates you receive. With a higher credit score, you’ll be able to qualify for a loan with more affordable interest rates, as well as lower monthly payments. If your score is on the lower side, it may be in your best interest to postpone your project until you can raise your score. This way, you’ll be able to qualify for a more affordable loan.
4. Credit Cards
Credit cards may seem like the quickest and easiest solution for anyone in need of fast financing for their renovations. However, it’s important to know what you’re signing up for before you decide to charge everything to your card. Experts advise against using credit cards as the sole financing method for remodeling your bathroom. If you aren’t taking advantage of credit cards with a 0% introductory financing offer, it may be difficult to pay down your debt once the promotional period ends.
Though credit cards are easy enough to use, they accrue interest quickly as well. If you’re interested in using credit cards, be sure to secure a credit card with low costs and low-interest rates to make the most of this financing option.
5. Company and Store Financing
In addition to loans, credit cards, and cash, another method to consider is company and store financing. Reach out to local home improvement companies and stores to see if they offer their customers lines of credit to complete home improvement projects. Most of these stores may even have 0% introductory financing for customers that qualify.
Be sure to read all the fine print and conditions before signing up for company and store credit cards. Many of these cards have high interest rates if you carry a balance after the promotional period ends. If this is the case, only use this financing option if you can confidently pay off your balance in full during the promotional period.
While you’ll have to pay the price for a bathroom remodel, the cost will be well worth it. Make sure you’re making the best financing decision with your renovation by keeping this guide in mind