How To Finance Home Renovations

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How To Finance 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?

Pros

Increase home value by making renovations

Create a more desirable living space

Flexible repayment terms

Cons

Interest charges and fees

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

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Conclusion

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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