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Paying for home remodeling projects can cost a little, or it can cost a lot, but there are many benefits. Remodeling your home may increase its value, and the process may also improve the overall enjoyment you receive in living there. Some remodeling projects are relatively easy to pay for and require just a few months or a year of putting some money aside.

Other remodeling projects are enormous and have price tags in the many tens of thousands of dollars. There are many ways to fund your home improvement project, and it's helpful to consider all options before committing to one funding type.

Here's one way to pay for your home remodeling project, and an unusual way, too.

The Tried & True Home Equity Line of Credit

If you've lived in your house for a few years, you've probably made payments on a mortgage that have resulted in the accrual of equity in your home. If you've been thinking about improving the kitchen, redoing the bathroom, or getting a new roof, a loan based on the equity you hold in your home could offer one of the lost-cost solutions.

The only problem you may run into with a home equity loan or line of credit is that you'll probably need to "own" about 20 percent of your home before you qualify.

The blog at credit.com shares:

"Generally speaking, lenders will require you to have at least an 80% loan-to-value ratio remaining after the home equity loan in order to be approved. That means you’ll need to own more than 20% of your home before you can even qualify for a home equity loan."

If you've only lived in your home for one or two years and had a small down payment, you might need to wait a few years before the bank will approve your loan.

Alternatives to Traditional Loans & Lines of Credit

Using the equity in a house is a pretty standard way to pay for upgrades and renovations. Home equity lines of credit often boast low interest rates that meet or beat traditional loan interest rates, which makes them an affordable option for funding a remodeling project.

However, there are a few interesting alternatives to home equity loans. One option is to fund the project with a credit card. It may seem illogical to pay for a large project with a credit card that might have anywhere from a 10 percent to 30 percent interest rate, but you can often apply for a new card with a zero percent interest rate that will last for anywhere from 12 to 24 months.

If you want to get your remodeling project done sooner rather than later and can pay the balance on the credit card off within the amount of time allowed for the zero interest rate, a credit card might be the way to go. You may even be able to improve your credit score with a new card.

The Spruce offers an interesting yet risky way to fund a home remodeling project with a credit card:

"Some homeowners pay off one zero-interest card with yet another zero-interest card, thereby creating a permanent, but risky, no-interest loan."

It's important to make sure that your efforts in improving your home don't put you into precarious financial straits.

If you're not comfortable putting a large balance on a credit card, or you aren't interested in a large HELOC, spending a few years on saving the money for a cash payment might offer the option with the lowest risk and likelihood of stress.

Let Forge Hill Construction Help With Your Remodeling Project

Are you thinking about a home remodeling project? Want to work with an experienced home remodeling contractor in New Jersey?

We’ve got the know-how and the experience to help you create a fantastic new space for you and your family. Let us help you design the best addition for your home by giving us a call at 1-973-627-2811, or use our contact us form to ask questions and get started on your home remodel.