Financing Home Renovations

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How To Finance Major Home Renovations

Financing may offer an affordable solution to make your home renovation or repair to do list more manageable. So how do you finance home renovations or repairs? Keep reading to find out the easiest and best options for financing major home renovations or repairs. We will cover different home renovation financing options. home repairs and costs, how to get a home renovation loan if you have bad credit, and so much more.

What are common home repairs and their costs?

In most cases, home repairs cannot be fixed with a bandaid. Most home renovations or repairs require extensive labor and materials, which adds up quickly. Let’s take a look at some of the most common home repairs and what they cost…

#1. Foundation repair

Foundation damage can occur from a variety of factors including shifting, weather, or expanding and contracting soil. If you have foundation problems you should repair them as soon as possible. Neglecting or ignoring foundation problems can lead to even more expensive repairs and severe damages. In some cases, foundation damage is not obvious for quite some time. However, there may be signs of damage such as doors sticking or not closing properly, sagging or uneven floors, counters and cabinets separating from the wall, and gaps around exterior doors or window frames. There are many different types of foundation problems including…

Foundation cracks, wall cracks, or fractures

Foundation settling or sinking

Foundation upheaval

Homeowners report paying an average of about $4,000 for foundation repairs. If you have major structural repairs it may cost $10,000 or more. If you need minor patching of small cracks it may only cost you about $500 or so.

#2. Electrical issues

While some home repairs can be done DIY style, electrical repairs are usually best suited for professionals. In most cases, electrical repairs are pricey. While basic electrical repairs may only cost a few hundred dollars, major electrical repairs can cost $15,000+.

#3. Roof repair

Next to a solid foundation, a functional roof is very important. If you are noticing leaks or missing shingles you may need roof repair. Similar to foundation problems, it’s important to address and fix roof problems immediately. Roof repairs can range from $650 to $10,000 and up. Installing a new roof can help increase your home value significantly.

#4. Water heater

Water heater repair or replacement is one of the more affordable home repairs on our list. In most cases, water heaters do not last forever. This means at some point they will require replacement or repair. Water heater repairs can cost about $500 while water heater replacement can cost about $1,000.

#5. Water damage

The cost of water damage can vary significantly. In some cases, water damage repair is minimal while in other cases it can cause major damage. In most cases, water damage costs at least a few thousand dollars or more.

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Why Acorn Finance for Home Repair Loans?

Acorn Finance puts you in control of your financial future – we let you compare personalized offers from lenders in our network, with no impact to your credit score. That means multiple loan offers for your home renovation projects in seconds. We’ll help you check for pre-qualified home renovation loans in seconds with our broad network of national lending partners. You can easily sort the offers based on what’s most important to you: interest rate, payment amount, length of the loan term. Our 100% online, customer-friendly process is designed to help you find affordable payment options with lenders that can quickly finance your renovation project.

How to finance major home renovations

When it comes to financing major home renovations you should look into a personal loan or a home equity loan. However, home equity loans may be riskier and do not work for everyone. In the next section, we will explain personal loans and home equity loans in more detail.

What are my options for financing a home renovation?

#1. Personal Loan

Using a personal loan through Acorn Finance is usually the best option for financing home renovation. Personal loans do not require collateral and have a fixed interest rate, making them a less risky option compared to home equity loans.

Acorn Finance can connect you to multiple top-rated lenders that offer personal loans for all credit types. Although you can shop online to see what different banks and lenders offer, you do not know what they will offer you until you apply.

Applying to multiple lenders can affect your credit score. However, applying through Acorn Finance should not affect your credit. You can submit one application and receive multiple personalized personal loan offers within seconds.

Acorn Finance offers personal loans up to $100,000 with rates starting at 4.99% and terms up to 7 years. You can use the funds for all of your home renovation or repair needs.

#2. Home Equity Loan

Home equity loans may have lower interest rates than personal loans but they can be harder to qualify for. In order to qualify for a home equity loan, you should have a decent amount of equity in your home. When you use a home equity loan you are essentially borrowing against your home. Using your home as collateral can make the loan less risky for the lender but riskier for the homeowner. In addition, home equity loans can have a longer approval process. However, in some cases, a home equity loan may be a good option for financing home renovation.

How to finance home renovation without equity

If you do not have equity in your home you should use a personal loan to finance a home renovation, improvement, or repair. Personal loans do not require collateral or down payments making them an easy financing solution for home renovation.

Is it hard to get a home renovation loan?

Getting a personal loan for home renovation through Acorn Finance is easy and fast. If you choose another option it may take more time and cause more headaches.

What credit score is needed to get a home renovation loan?

Acorn Finance offers home renovation loans for all credit types. Most lenders evaluate borrowers based on credit score, income, debt-to-income ratio, age of credit, and more. Therefore, even if they have a minimum credit score requirement you may still qualify. Most lenders like to see a credit score of 580 or higher.

Can you get a home renovation loan with bad credit?

If you have bad credit, you can still qualify for a personal loan. If you can add a cosigner with good credit to your application it can increase your chance of approval and help you lock in a lower rate.

What kind of loan is best for home renovations?

In most cases, a personal loan is the best and easiest option for financing home renovations. However, each homeowner has their own situation so you should explore all options to determine which is best for you. Other options can include a home equity line of credit, home equity loan, mortgage refinance, or credit cards.

Home equity lines of credit and home equity loans can involve more risk and be more complicated than personal loans. If you use a home equity loan you should have a fixed interest rate, similar to personal loans.

Home equity loans and home equity lines of credit are not the same thing. Home equity loans allow borrowers to borrow in a lump sum and make fixed monthly payments. Home equity lines of credit are similar to a credit card.

Borrowers receive a maximum amount available and are able to borrow money multiple times as long as they do not exceed the maximum amount. Refinancing your mortgage can make sense in some situations. You should consult a professional to determine if refinancing is a good option.

Out of all the options, credit cards will most likely have the highest interest rates.

What are the costs and fees involved with a renovation loan?

If you are using a personal loan for home renovation you may have interest charges, origination fee, late payment fees, and in some cases early payoff penalties. It’s important to compare offers rates and terms. Most lenders have origination fees of about 2%-3%. If you have excellent credit you may qualify for a lender that does not charge an origination fee. Most lenders do not have early payoff penalties. It’s important to read the terms before signing into the loan.

What are the pros and cons of home renovation loans?


Increase home value by making renovations

Create a more desirable living space

Flexible repayment terms


Interest charges and fees

Taking on more debt (even though it may be “good” debt!)

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How do you renovate a house with no money?

Renovating a home with literally no money is impossible. If you are living in an unsafe home that needs renovations that you are unable to afford, you may want to contact local charities. In some cases you may be able to secure some type of funding to help fund home improvements. Your local Housing and Urban Development (HUD) may be able to notify you of local grants in your area. In addition the National residential Improvement Association may be able to assist.

Home improvement grants are designed to remove health and safety hazards that might be present in your family home. If you decide to go this route, be prepared to meet strict criteria. If you are over the age of 62 years old, you may qualify for a grant with the Rural Development arm of the U.S. Department of Agriculture (USDA). Some of the basic criteria you will need to meet includes owning and occupying the home, must meet income requirements, and must be unable to qualify for affordable credit. If you do qualify for a USDA award, you can receive a lifetime award up to $7,500. The funds can only be used for hazardous repairs, not cosmetic repairs.

Low income individuals may also be able to access assistance through the HOME Investment Partnership Program. HOME is a division of HUD. If you need weather or emergency repairs, you may want to contact HOME. The USDA and HUD can also help lower-income homeowners make home repairs by providing affordable loans.

While you may be able to make temporary repairs that cost little to no money, you will need money to renovate your home or make home repairs. Even if you can do most of the work yourself, you’ll still need the right materials and equipment, which can cost money.

Can you borrow money for renovations?

Yes, you can borrow money for renovations. In fact, you can secure financing for just about any kind of renovation. Whether you want to install a pool and landscape your yard or build a sunroom, you can borrow money. You can also borrow money to make necessary repairs such as replacing an HVAC system or treating termites. Before you jump to securing a loan for renovations, you should determine what renovations will cost and how much you need to borrow. In some cases, you may only need to borrow a portion of the project cost. In other cases, you may need to borrow the full amount. It may be a good idea to borrow a little more than you think you need in the event you encounter some surprises.

If you are purchasing a home that needs renovations completed before you move in, you may be able to use a Fannie Mae HomeStyle renovation loan. This is a non-government loan that allows homebuyers to use one loan for the purchase and renovations. Lenders can use the expected property value to determine how much they can loan. If you want to use a Fannie Mae HomeStyle renovation loan you will need to find a private bank or mortgage companies that can offer them.

If you already live in the home that needs renovations, you may want to consider a secured loan such as a home equity loan or line of credit. However, you will need to have equity in your home to qualify for these options. In addition, you will need to borrow against the equity in your home.

For home renovations less than $100,000, you may want to consider an unsecured personal loan. Whether you live in the home or are purchasing the home, you can secure a personal loan to pay for home improvements. Unsecured personal loans do not require collateral making, equity, or money down.

Can you borrow against your home for renovations?

If you have equity in your home, you can borrow against your home or use it as collateral. This can actually be a smart way to finance home renovations. If you borrow against your home equity you are most likely using a secured loan such as a home equity loan or line of credit. Secured loans can offer low interest rates and long repayment terms, which can make home renovation financing more affordable. However, before committing to a secured loan you should consider the risks as well. If you default on a secured loan, the lender can repossess your home. Afterall, that was the point of offering it as collateral. When lenders have collateral, such as real estate, their risk is reduced. If you default on the loan, they can take ownership of the collateral. In exchange, the bank may offer a lower interest rate or longer repayment term. Whether you pay the loan off on time or default, they have a chance to financially gain.

If you are confident that you can repay the secured loan, it can be a cost-effective way to finance home renovations. However, if you are barely covering your mortgage as it is, you should think twice before borrowing even more money. To qualify for a home equity loan you will need to have equity in your home, plenty of income, and a reasonable debt-to-income ratio. Most lenders require that homeowners have at least 15% equity in their home. Some may assume that you can qualify for a home equity loan with bad credit since you are proving collateral but this is not always the case. You should have a credit score 620 or higher to qualify for a home equity loan.

What is the cheapest way to borrow money for home improvements?

The cheapest way to borrow money for home improvements can vary. If you can pay cash for home improvements, this is ultimately the cheapest route. When you get into financing you usually run into interest and other fees that cause the cost of renovations to increase. In some cases, you may be able to purchase materials such as flooring from a retailer that offers promotional financing. In some cases, a retailer may offer 0% financing for a short term. If you can cover the monthly payment and pay of the loan before the promotional period ends, this can be a cost effective way to finance some or all of your project costs. However, since promotional financing is usually only offered for short terms, the monthly payments may be out of your budget.

The cheapest way to borrow money can vary depending on the situation. As a homeowner, you should compare financing offers to determine which offer makes the most financial sense. While you may get one offer and be able to cover the money payment, you should always compare loan offers before accepting one.

Can you get a home renovation loan with bad credit?

You can get a home renovation loan with bad credit, but it’s important that your expectations are realistic. If you are looking to borrow thousands of dollars with a single digit interest rate, you may be setting yourself up for failure. Even lenders that work with bad credit borrowers will usually charge high interest rates. Your best option is to rebuild your credit and pursue a home improvement loan at a later date. However, if you feel that you can’t wait, you should compare offers. You may also want to consider different types of loans such as secured loans or FHA loans. If you have a willing cosigner with good credit this can also help increase your chance of approval. It can also help you qualify for a lower interest rate.

Can you get a home renovation loan with bad credit and no equity?

If you don’t have any equity in your home, you won’t be able to get a home equity loan to pay for your home renovations. You might be able to still get a personal loan though. If your credit is fair or bad, you might need to get a secured personal loan or a cosigner to get better interest rates that are more affordable. Overall, regardless of the type of loan, borrowing money with bad credit should be avoided. You should address why your credit is bad and work on rebuilding credit before applying for a loan. If you have already done this, you may need to borrow small amounts of money again to start rebuilding your credit score. If this is the case you should consider using a personal loan.

Is getting a home renovation loan with bad credit impossible?

Getting a home renovation loan with bad credit is not impossible, but it may be harder than for someone who has good or excellent credit. You might need to spend more time shopping around for lenders and finding companies who are willing to work with you.

You might also need to look at fair credit borrowers and see if they are more willing to help. You also might not be able to qualify for a loan of the amount you need, but rather a smaller amount that the lender considers less risky. You might also have high interest.

Can you finance home renovation with a personal loan?

Yes. Homeowners often use unsecured personal loans as a way to finance home improvements or home renovations. Personal loans are often called home improvement loans. Home improvement loans can be used without providing collateral, which is attractive to some borrowers. If you don’t have equity in your home a personal loan may be one of your only financing options. However, there are many homeowners that just prefer not to use their home as collateral. In addition, the process is much simpler for an unsecured loan. If you have good to excellent credit, you should be able to get a low-interest loan with competitive repayment terms.

Can you get a home renovation loan with a 600-credit score?

It is possible to get a home renovation loan with a 600-credit score. Lenders might even be more willing to give you a loan if you have a high income or a low debt-to-income ratio. Each lender is different, so it is worth it to shop around for lenders before choosing one.

Fair credit lenders will also work with people who have a credit score of 600 or less. They might offer high-interest loans though. Always compare rates and fees when looking at lenders.

What lenders provide home renovation financing for bad credit?

Some lenders may specialize in helping borrowers with bad credit. If you have bad credit you will want to find one of these lenders. However, just because they can approve your loan does not mean they are willing to take the risk for free. If you have bad credit there is really no way around the fact that you will probably have to pay high interest rates. If you need an emergency home repair you may have no other choice but to borrow the money.

While every lender is different, here are some lenders that are known for giving personal loans to people with bad credit:

Universal Credit

You can also check with your bank or credit unions to see if they have options for lending to people with bad credit.

How to finance home renovations with bad credit?

If you have bad credit and you want to finance home renovations, you can consider getting a home equity loan. Usually, these loans are given out to people who have substantial equity built up in their homes. A good to excellent credit score is usually not required in many cases. However, you will need to have high equity in your home before applying.

You can also try to qualify for loans offered by online lenders or credit unions. An FHA loan may also be an option. Try to find a lender that looks at more than just your credit score when it comes to borrowing. If you have a high income or a low debt-to-income ratio, you might be able to get a loan based on those factors instead.

While there are ways to get financing with bad credit, you should address your credit score at some point. It may feel impossible to get away from a bad credit score but just know it is possible. While you may need to borrow money and establish better credit to boost your credit score, you may have to pay a premium to borrow the money. If you are using the funds to make home improvements at least you are increasing the value of an asset.

What is considered bad credit when looking for home renovation financing?

The first thing lenders will probably look at when they are considering giving you a loan is your credit score. Some lenders will only look at your credit score to determine whether they will give you a loan or not. You’ll want to ensure you have the credit score that’s needed before applying to a lender for a loan.

Poor or bad credit is considered less than 580. However, just because you have a higher score than 580 does not mean you will get the loan you are applying for. Most lenders require you at least to be in the fair range, which is between 580-669. Even more so, lenders will want to see a score of at least 640.

This is considered a below-average score, but on the end closer to the “good” range when it comes to credit. Having a score of 640 means you are less risky as a borrower and lenders will be more willing to lend funding to you. If you are wondering what your credit score is, you might want to check with an online resource before you begin applying for a loan.


If you are looking for a home renovation loan you should take advantage of Acorn Finance. Home renovation loans can be a wise investment that can increase your home value or provide a more functional living space for your family. Acorn Finance offers a secure platform that allows you to compare personalized personal loan offers without affecting your credit.

Take advantage of low-interest rate home renovation loans… apply online today!

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