Don’t know where to get the funds for your kitchen renovation? It’s exciting to think about making all the changes you want in your kitchen, but you can’t ignore the elephant in the room: money. As you know, money plays a big role in triggering emotions and influencing decisions. Thankfully, there are many ways to finance your kitchen remodeling project—including a mortgage option not many people are aware of.
Is a Renovation Only for the Wealthy?
When you look at before and after pictures of kitchen renovations, you probably wonder whether you could afford to take on such a huge project yourself. At first glance, it seems impossible given your middle-class salary. But what you should keep in mind is that you can start renovating your kitchen despite not having piles of cash on hand. And if you’re a first-time home buyer, things may prove to be a little easier than you think.
Using a Renovation Loan
Ever heard of a renovation loan? If not, don’t fret. Many people aren’t familiar with this type of loan, too. But it can prove to be the solution you’re looking for to bring your kitchen remodeling ideas to life. Basically, it works by offering you the option of receiving a bigger loan amount, up to 50% more of the purchase price of the property. Since you’re getting more money, you can invest some of it toward renovating the kitchen.
Here’s an example. Let’s say you find a $100,000 home for sale. After looking at similar but renovated houses in the neighborhood, you’re certain that its value can easily reach $200,000 after doing some construction work. You then go to the bank to apply for a mortgage-construction loan. If the bank approves your application, you might get a loan amount of $150,000, giving you more than enough money to cover the purchase price and renovation costs.
Take note that this loan will probably come with a bigger mortgage payment since the renovation costs are rolled into your mortgage. But if you crunch some numbers, you will find that it’s still a great option for financing your kitchen remodel. You just have to be patient when it comes to finding a lender that offers a renovation loan. National lenders may not be offering this option, so look at local lenders instead.
What If You’re Not Buying a Home?
How about those who already have an existing home and only want to renovate their kitchen? If you belong to this group, then more traditional options may suit your needs including home equity loans, interest-free credit cards, or good-old saving enough cash to fund your remodel little by little.
There’s always the option of moving into a home and making small changes over the years. You can even choose to learn to do things by yourself, saving you a ton of money as long as you know what you’re doing. But if you want to speed things up a bit, know that applying for loans can be a cost-effective way to start building your dream kitchen. And once you have gathered enough funds, click here to get your kitchen remodeling project started.