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Best way to finance a kitchen renovation?
Posted on 7/7/21 at 2:22 pm
Posted on 7/7/21 at 2:22 pm
I’m looking to do a kitchen renovation that would likely be in the $20,000 or more range. I doubt I have enough equity in my home for a HELOC right now. I owe $191,000 and the home would likely appraise for roughly $250,000-$260,000 so I doubt the percentages are going to allow for enough of a loan, unless my understanding of how HELOC funding works is incorrect.
Are personal loans smart to use? Credit is not an issue whatsoever as both of our credit scores are 800. How do most people finance a renovation like this? We used a personal loan a few years ago for a bathroom renovation but the interest rate was 4.25% which I thought to be a little high at the time. What’s the best way to do this?
Are personal loans smart to use? Credit is not an issue whatsoever as both of our credit scores are 800. How do most people finance a renovation like this? We used a personal loan a few years ago for a bathroom renovation but the interest rate was 4.25% which I thought to be a little high at the time. What’s the best way to do this?
This post was edited on 7/7/21 at 2:24 pm
4
Posted on 7/7/21 at 2:53 pm to TDsngumbo
Most banks will finance up to 90% through HELOC.
$250,000 * 90% = $225,000 - $191,000 = $34,000 HELOC
Not sure what all you are doing but $20k does not go very far when renovating a kitchen.
If you have good credit and a good relationship with the bank a personal loan will not be that much higher than a HELOC rate (in my experience). And you will likely have some fees associated with establishing the HELOC. The HELOC does give you the availability to deduct the interest which is a plus.
$250,000 * 90% = $225,000 - $191,000 = $34,000 HELOC
Not sure what all you are doing but $20k does not go very far when renovating a kitchen.
If you have good credit and a good relationship with the bank a personal loan will not be that much higher than a HELOC rate (in my experience). And you will likely have some fees associated with establishing the HELOC. The HELOC does give you the availability to deduct the interest which is a plus.
Posted on 7/7/21 at 2:55 pm to TDsngumbo
How much do you have in accessible savings?
Posted on 7/7/21 at 3:02 pm to TDsngumbo
I use cash for this kind of stuff but that is just me.
Posted on 7/7/21 at 3:09 pm to BamaAlum02
quote:
Not sure what all you are doing but $20k does not go very far when renovating a kitchen.
This. If part of the renovation is appliances, then I would hold off on the new appliances. Get the construction done, then stagger in the appliances.
As stated above, depending on your income, you should be able to get a $20k signature loan w a decent credit score from your bank or a local credit union. But, as stated above, if you can hold off on new appliances, you can stagger the costs.
Posted on 7/7/21 at 3:27 pm to Weekend Warrior79
I’m not doing anything major, just simply updating everything - new floor, new cabinets, new countertop, and refinishing the drywall ceiling with née light fixtures. The layout is going to remain the same.
Posted on 7/7/21 at 3:47 pm to notsince98
quote:
I use cash for this kind of stuff but that is just me.
Posted on 7/7/21 at 5:16 pm to TDsngumbo
You can do a renovation refinance- I would have to do a deeper dive but on the surface, this would qualify.
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