Can you finance a kitchen remodel?

Asked By: Joelma Kreps | Last Updated: 13th February, 2020
Category: personal finance home financing
4.4/5 (51 Views . 36 Votes)
You can finance your kitchen remodel with a home equity loan or a home equity line of credit (HELOC). Both of these options use your home as collateral. That means if you fail to make the payments, you risk losing your home. But securing your loan with collateral also means lower interest rates and easier approval.

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Moreover, what kind of loan do I need for a kitchen remodel?

If you're borrowing money to remodel your kitchen, you can choose from a few different types of loans. One possibility is a home equity loan or line of credit. Home equity loans often have lower interest rates than personal loans because they're secured loans, with your house guaranteeing the debt.

Additionally, how does it cost to remodel a kitchen? On average, a kitchen remodel costs $25,086 or $150 per square foot. Most homeowners spend between $13,170 and $37,003 or $75 to $250 per square foot. The total expense varies depending on the size of the space, the quality of materials, and whether you change the layout of the room.

Keeping this in consideration, what is the best way to finance a kitchen remodel?

Unsecured Home Improvement Loans

  1. Low To No Interest Credit Cards. If you have good credit, you probably get low interest credit card offers in the mail all the time.
  2. Personal Loans.
  3. Cash Out Refinance.
  4. Home Equity Loans.
  5. Home Equity Line Of Credit 'Heloc'
  6. Borrow Against Your 401K.

Can you get a construction loan for a remodel?

To pay for large remodeling projects such as this, homeowners often take out a construction or renovation loan, which entails refinancing with a mortgage that reflects the house's estimated value post-remodel. Many lenders provide mortgages that cover up to 80 or 85 percent of the remodeled home's value.

33 Related Question Answers Found

What is renovation financing?

A home renovation loan gives homeowners access to funds needed to fix up their home. These renovation loans can come in the form of mortgages with built-in fixer-upper funding or personal loans.

How do you pay for remodeling?

Home Equity Loan or Line of Credit (HELOC)
A home equity loan is the classic way to finance home renovations. Take out a loan against the equity in your own house. Lower interest rates than personal loans and credit cards. Large amounts of money may be available for large projects like additions.

Does Home Depot do kitchen remodeling?

Why Choose The Home Depot
The Home Depot is a great place to buy your kitchen appliances and remodeling materials. We also provide top-rated design and installation services for homeowners across America. Besides undergoing full background checks, our hand-selected remodeling experts are local, licensed and insured.

How do you finance a home purchase and remodel?

Fannie Mae's HomeStyle® Renovation Mortgage allows homebuyers and existing homeowners to combine their home purchase or refinance with the financing needed for renovations and repairs into a single mortgage, rather than seeking a secondary loan, such as a home equity loan or line of credit.

How soon after buying a house can I get a home improvement loan?


Technically, you can get a home equity loan as soon as you purchase a home. However, home equity builds slowly, which means it can take a while before you have enough equity to qualify for a loan. It can take five to seven years to begin paying down the principal on your mortgage and start building equity.

What is the difference between a home equity loan and a home improvement loan?

Typically borrow up to 85% of their equity, and the loan is made for a fixed amount of money, in a lump sum. A home equity loan has similar interest rates as but is distinct from a home equity line of credit (commonly known as HELOC), which acts as a revolving line of credit rather than a one-time installment.

Can you get a kitchen on finance?

Wren Kitchens Limited acts as a credit broker and not the lender. Barclays Partner Finance acts as the lender. Our new finance deal available on all kitchens helps you spread the cost of your new kitchen. You can make overpayments or pay off your agreement early at no additional cost.

How can I get a personal loan online?

How to Apply for Personal Loan?
  1. Fill in the online application form with your personal, employment and financial details.
  2. Choose your loan amount and repayment tenor to receive instant approval.
  3. A Bajaj Finserv representative will get in touch with you.
  4. Receive disbursal of your loan within 24 hours of approval.

How do I design a kitchen remodel?

Try different kitchen cabinet layouts to find the kitchen design that suits your lifestyle. Test different colors, textures and wall finishes such as paint, tile or wallpaper to find the look you love. The simple drag-and-drop application makes trying different kitchen design ideas fast, easy and fun!

What is a good interest rate for a home improvement loan?


Estimate your home improvement loan rate
Interest rates on personal loans generally range from about 6% to 36%. As with most credit products, the rate you receive depends a lot on your credit score. The better your score, the lower your rate and the less interest you'll pay over the life of the loan.

How do you buy a house that needs renovations?

8 top tips for home buyers taking on a renovation property
  1. Be wary of building regulations and planning permission.
  2. Commission a full building survey.
  3. Consider how much stress you can handle.
  4. Find the right mortgage lender.
  5. Create a realistic budget.
  6. Start at the top and work down.
  7. Get the experts on side.
  8. Set a little extra money aside for any unexpected costs.

How do you pay for an addition?

Use a Home Equity Loan or Line of Credit
Rather than paying off your home renovation debt over 30 years, a home equity loan or line of credit gives you a separate monthly bill to cover the costs of your home addition.

How do you finance an extension?

If you already own the property you plan to extend (or, indeed, renovate), you have three main choices:
  1. Increase your mortgage to release funds.
  2. A home improvement loan secured against your home is the next cheapest option.
  3. The final option is a straightforward personal loan.

How do you get a home improvement loan?

Steps Needed to Get a Home Improvement Loan
  1. Be specific about your need for a loan.
  2. Ask for a specific amount.
  3. Check your credit.
  4. Check the equity in your home.
  5. Ask if you really need a home improvement loan.
  6. A USDA Loan.
  7. Get a co-signer.
  8. Mortgage refinancing.

Are unsecured home improvement loans tax deductible?


It's possible to pay for home improvements by using unsecured personal loans. However, even though you use those loans for making capital improvements at your house, you won't be able to deduct the interest on your taxes. The interest savings might exceed the value of a tax deduction.

What is the average interest rate on a personal loan?

Best Personal Loan Rates for March 2020. Personal loan interest rates currently range from about 5% to 36%. The actual rate you receive depends on multiple factors, such as your credit score, annual income, and debt ratios.

Can I borrow more money on my mortgage for home improvements?

What is additional borrowing? Additional borrowing means that when you remortgage you borrow more money and therefore increase the overall size of your mortgage. You can then use these extra funds to pay for home improvements or school fees, for example.