It is everybody’s dream to own a house, but after building, leasing, or buying the house, whether you live alone or live with your family, maintenance and home improvement are continuous processes for as long as you live in the house.
It is most likely that you will have one or two projects to carry out in various intervals in your home. For example, you may need to change the leaky roof, refurbish the kitchen cabinet, etc.
This article will look at some of the best ways to finance your home improvement and best home improvement loans, among other things related to home improvement, to be discussed.
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The process of making an addition or renovating one’s home, i.e., upgrading of home interiors, exteriors, or other improvements to the property, is known as home improvement.
Home improvement, also known as home renovation or remodeling, is an industry worth almost $300 billion in the U.S, and the average cost per project is recorded to be $3,000 in the United States.
There is always a need to work on your home’s electrical or plumbing appliances or renovate the roofing, concrete, or masonry to a new look or your preference. Whatever reason that might prompt you to make these changes, one of the questions that come to mind is “What is the best way to finance home improvement?”
Best Way to Finance Home Improvement
Data by a traveler’s insurance survey shows that 75% of Americans will be making improvements to their homes because of the increasing transition to work–from–the home that has become the order of the day, all thanks to improvement in technology. But home improvement doesn’t come free, as financial experts recommend you save between 1% and 3% of the initial value of your home for repairs and maintenance annually.
So as much as you will spend money on your home improvement, you can as well, do it yourself by learning one or two skills to knock off a large percentage of your potential repair bill.
One of the best ways to finance home improvement is by “doing it yourself,” Below is where to learn home improvement skills.
- You Can Learn Online
As regards doing it yourself, you can go online by visiting “Houzz,” a social media platform that connects enthusiastic “Do it Yourself” remodelers and home professionals for inspirational designs and tutorials. Other sites you can also explore are Youtube and Wikihow.
- Visit a Workshop
Some prefer physical classes to online tutorial videos. You can also explore the option of visiting a nearby community college that offers home improvement classes or find in-person instruction at hardware stores like Lowe’s or Home Depot for a nominal fee.
- Volunteer to Gain Experience
You should volunteer and make yourself available to get hands-on experience with a real house, and to do this, you need to sign up for a local Habitat for Humanity build.
Some home improvement projects may require you to hire professionals, which will result in you spending from your savings to finance the projects.
7 Best Ways to Finance Your Home Improvement
1. Pay Cash
It is probably the easiest choice to make if you have the cash to shell out, but the questions are “How much should you shell out for your home renovation?” and “when should you hold onto your cash?” instead.
2. Apply for HELOC
This is another source of funding that offers three options: home equity line of credit (HELOC), cash-out refinancing, and home equity loan.
3. Dip Into Your Savings
This is where the habit of savings saves you from the embarrassment of inevitable home repairs and projects. You should set aside a token in your emergency fund that can be used for emergencies.
4. Use Cash-Out Refinancing
The cash-out refinance is probably the best option if you are planning to stay in your home for several years to recoup the cost, and it is when you replace your existing mortgage with a new one at a larger amount.
5. Use a Home Equity Loan
One of the best home improvement loans is the home equity loan, also known as the second mortgage. It is a process where you pay back the money borrowed from a lender at a fixed interest rate over some time.
6. Accept a 0% Financing Offer
The option of a 0% financing offer defers your loan interest and is not necessarily an interest-free loan. But so long as you pay your full amount in the introductory period’s deadline, you will get your interest waived.
7. Apply for a Home Improvement Personal Loan
Aside from the home equity loan, you can also apply for one of the other home improvement loans, the “personal loan,” which is relatively faster and easier than the home equity loan. A personal loan is considered an unsecured loan with less paperwork, and your account should be ready in less than a week when you apply for an online personal loan.
For your home improvement, you should also think about the tax deduction, which is the deduction that lowers your tax liabilities by lowering your taxable income. Knowing what tax deduction means, the next question should be “What home improvements are tax-deductible?” but before that, let’s see if home improvements are tax-deductible.
Are home improvements tax deductibles? For federal income taxes, home improvement taxes are generally not deductible. However, renovation for medical purposes may qualify as tax-deductible medical expenses, and also, you may qualify for a tax credit by installing energy-efficient equipment on your property.
Let’s take a look at home improvements that are tax-deductible in 2023
|Home improvement||Types of savings||When you can claim it|
|Energy-Efficient Renovation||Credit||Same year|
|Home Office Improvement||Deduction||Same year|
|Home Improvement for Resale value||Deduction||Year of sale|
|Home Improvement for Medical care||Deduction||Same year|
|Rental Properties Renovation||Deduction||Same year|
Best Credits Card for Home Improvement
|Credit card||Best for||Credit score||Annual fee||Welcome Bonus|
|Chase Freedom Unlimited®||Best overall||Excellent/Good||$0||$200 bonus|
|Chase Sapphire Preferred® Card||Best for Flexible Rewards||Excellent/Good||$95||100,000 bonus points|
|Citi Rewards+® Card||Best for Small Projects||Excellent, Good||$0||15,000 points|
|Chase Sapphire Reserve®||Best for Travel Perks||Excellent||$550||60,000 bonus points|
|Ink Business Preferred® Credit Card||Best Business Welcome Bonus||Good, Excellent||$95||Earn 100,000 bonus points|
|U.S. Bank Visa® Platinum Card||Long Introductory 0% APR Offer for Purchases||Good/Excellent||$0||N/A|
|Ink Business Cash® Credit Card||Best for Home Improvement Gift Cards||Good, Excellent||$0||Earn $750 bonus cash back|
|Capital One Venture Rewards Credit Card||Best for Flat-Rate Travel Rewards||Excellent, Good||$95||60,000 miles|
Best Home Improvement Loans
|Lending Partner||APR||Term||Max Loan Amount|
Owning a home is not enough, but maintaining and improving the home to standard and the latest trend is what makes you a “concerned homeowner” who wouldn’t watch his home depreciates over damages and other home appliances faults. This article must have helped you in determining the best way to finance your home improvement.