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How to Finance a Home Renovation

Home renovations can increase the resale value of your home and make your home more approachable to buyers. Contrary to popular belief, you don’t have to spend a lot of money on renovations to make a lasting impact.

Here are some ideas on how to finance home renovations.

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How to Finance a Home Renovation

If your finances and credit score are in good shape, you may have a slightly easier path toward finishing a home renovation. Here are two options to help you finance a home renovation:

  1. Save money and pay with cash—Paying in cash can be better than using a credit card because it’ll help you stay within your budget and prevent you from paying high interest rates. 
  1. Apply for a loan—Taking out a personal loan is a good way to obtain a line of credit without having to put up your house as collateral. If you’re buying a home and want to renovate right away, some lenders will allow you to borrow against what the property value will be after the renovations are complete.

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Additional Strategies to Finance Home Renovations

Outside of traditional borrowing channels, here are a few creative ways to finance a home renovation.

  1. Take out a Home Equity Line of Credit—Taking out a home equity line of credit (HELOC) is a common way to borrow against the value of your home. A HELOC commonly offers financing for up to 85% of the value of your home.
  1. Refinance your home mortgage—If you’re paying an interest rate higher than what the current market dictates, refinancing your mortgage can lower it. With lower mortgage payments, you can put more money toward a home renovation. However, keep in mind that this strategy involves you putting your home up as collateral.
  1. Renovate on a budget—If you simply don’t have the budget to make drastic changes, consider smaller projects—like installing crown molding or landscaping—that can still increase the resale value of your home. 

No matter your situation or what option you pursue, one fact is clear—those wishing to renovate their home should weigh their options because each individual situation will vary.

Save for Home Renovations With Synchrony Bank

Whether you’re borrowing money or patiently saving to pay in cash, Synchrony Bank offers financial products to make your home renovations attainable.

Our high yield savings accounts, certificates of deposit (CDs) and Individual Retirement Accounts (IRAs) have all won numerous awards and can help you save for your home improvements.* 

Now that you know how to finance a home renovation, call us at 844-345-5789 to open a savings account today.

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Sources:

Bank Rate: www.bankrate.com/finance/mortgages/mortgages-pay-home-renovations-1.aspx

Nerd Wallet: www.nerdwallet.com/blog/mortgages/home-equity-line-of-credit/ 

House Method: https://housemethod.com/inspiration/adrienne-hubbard-interview-spruce-up-your-home/

*Synchrony Bank does not provide financial advice, so be sure to consult with your tax advisor or financial consultant before opening or contributing to an IRA.


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