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Home Improvement Payment Options

Just as contractors match the right tool to the job, savvy homeowners match the size and scope of the project to the right sources of financing.

Give our team a call to speak to an in-house specialist, who can work with you to meet your specific needs.

COMPARE HOME IMPROVEMENT FINANCING CHOICES

CASH

Pluses

No debt, interest rates, credit check, paperwork, payments, loan fees or closing costs. And you know exactly what you have to spend.

Minuses

Do you have a better use for this money?

Best for

Whatever amount you can comfortably cover at one time.

CREDIT CARDS

Pluses

No closing costs, home appraisal or loan fees; no credit check, and you're not using the house as collateral. Depending on the card, you can earn discounts on materials and supplies, airline miles, points or cash back.

Minuses

Increasing your debt load. APRs are two, three or four times as high as interest rates on home equity loans and mortgages; interest is not tax deductible. Running up the card could lower your credit score, and one risk is a card issuer could cut your spending limit.

Best for

An amount you can comfortably pay off fairly quickly. For most, this would be smaller projects, or an ongoing remodel where you expect to be making substantial payments regularly.

PACE FINANCING - Learn More By Clicking Here

Pluses

No FICO requirements. May be transferred upon sale of the home. 100% financing with $0 out of pocket expenses. Often no prepayment penalty. Repaid directly through property taxes.

Minuses

Not all contractors offer it. Limited to approved upgrades. Becomes a priority lien and your property is the collateral.

Best for

Jobs of varying sizes. Home owners who do not want to use any cash. Both long and short-term financing. Limited credit and income requirements.

HOME EQUITY LOAN

Pluses

With a fixed-rate loan, no surprises. Rates better than credit cards and personal loans. Interest is usually tax deductible.

Minuses

Requires home appraisal, equity and good credit. Increases your debt load – with your house as collateral. Costs and time associated with loan similar to those of a first mortgage.

Best for

Projects with a price tag large enough to justify the costs and paperwork.

HOME EQUITY LINE OF CREDIT

Pluses

Take as much as you need, when you need. Usually has a variable rate, but some may have fixed-rate options. Interest should be tax deductible. Lenders often waive many or all fees.

Minuses

Requires home appraisal, equity and good credit. Increases debt load, with house as collateral. Borrowers sometimes confuse introductory rate with permanent rate.

Best for

Substantial projects that may extend over a longer period of time. Projects where you may need some monetary flexibility.

CASH-OUT REFINANCING

Pluses

The opportunity for a "do-over" on your mortgage rate. Next to cash, a fixed-rate loan is potentially the cheapest money available for home renovations. Interest should be tax deductible.

Minuses

The math doesn't work for every homeowner – not worth it if you can't beat your current rate. Some cash-out loans will come with a higher interest rate. Requires home appraisal, equity and good credit. Increases your debt load – with your house as collateral. Costs and time associated with loan similar to those of first mortgage.

Best for

Homeowners who want to refinance; projects with a price tag large enough to justify the time and cost.

FHA TITLE I PROPERTY IMPROVEMENT LOAN

Pluses

May not be any equity requirements or origination fees. Loan term can be up to 20 years. Many participating banks and credit unions.

Minuses

Not as prevalent as some financing. The agency says 5,576 such loans were made in 2015. Lenders may set their own lending requirements regarding equity and home value.

Best for

Homeowners with little or no equity who need to borrow less than $25,000.

PERSONAL LOAN

Pluses

Not putting your house at risk.

Minuses

Not all banks and credit unions make these loans; rates likely twice as high as for conventional home equity or mortgage loans. Requires good credit. Adds to your debt load.

Best for

Smaller improvements for homeowners with good credit

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