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Lawrence D Lewis, RE/MAX NexusPhone: (248) 891-4269
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How to Finance Large Home Remodeling Projects

by Lawrence D Lewis 10/02/2021

When you plan to do a few smaller remodeling projects, you might fit them into your budget easily and over time. However, larger or more complex home remodeling projects might be harder to afford. If you aren’t able to pay for these kinds of upgrades upfront, you can look into financing options. These options allow you to have remodeling done now instead of putting it off longer. Consider financing home remodeling projects if you’re planning to put your home on the market soon or if you’re making upgrades to replace parts of your home that are old, worn or damaged. These are some of the more common financing options available for homeowners who want to remodel their home.

Loans for Home Improvement

When you can’t afford to cover the cost of remodeling upfront, you can explore home improvement loan options. These loans are unsecured, so you don’t have to worry about your home being used as collateral. However, home improvement loans are usually only available in smaller amounts, which can lead to limited choices in terms of the remodeling projects you have in mind. These loans also tend to have higher interest rates and need to be paid back in a shorter amount of time compared to other options.


Home equity lines of credit, also known as HELOCs, are secured loans that require you to use your home as collateral. The upside to these loans is that they generally have lower interest rates compared to unsecured loans. You can also use them for multiple home remodeling projects as needed, since they’re a source of revolving credit. Keep in mind that you’ll need to make sure you’re making payments on time, since your home is collateral.

Home Equity Loans

Home equity loans provide an alternative source of financing to HELOCs. These loans have a fixed interest rate, unlike HELOCs, which have a variable interest rate. Home equity loans typically have fixed payment amounts that you pay over a certain amount of time, which can help you plan your repayments better. Choosing a home equity loan might be a better option than a HELOC if you don’t need access to a revolving line of credit, such as when you know the amount your home remodeling project will cost and you’re not planning on making any other major upgrades.

Credit Card

Credit cards provide a convenient way to pay for minor upgrades when you don’t have the money upfront. You should avoid using credit cards for costly upgrades, though, since these cards typically have higher interest rates. Keep in mind that the amount you can spend on home upgrades depends on your credit card limit, although you do have the option to request a higher limit if needed.

Mortgage Refinance

Refinancing your mortgage offers another way to pay for home upgrades when you need to do them sooner rather than later. If your new mortgage is more than your current one, you can use a cash-out refinance to spend the extra amount on home remodeling projects. You might consider this financing option if you’re able to get a lower interest rate on your mortgage compared to your current rate.

About the Author

Lawrence D Lewis

My 20-plus years in the service industry has helped prepare me to listen, serve, and consistently deliver for you. I'm a full time Realtor who is motivated to work for you to achieve your buying or selling goals.