I'm curious about how people actually pay for their home remodels. For example, I've heard people say they spent $75k on a contractor for a basement remodel or $40k for a new kitchen. What payment methods do they typically use? Are home equity loans common?
3 Answers
A lot of people use a mix of cash, home equity lines of credit (HELOCs), and sometimes credit cards. I've seen some folks get IRA loans or even personal loans to cover costs. It really depends on what they have available or comfortable with.
I just did a kitchen remodel for around $40k and paid in cash after saving up for it. I know many friends who have avoided loans and are leaning on home equity, particularly before interest rates shot up. HELOCs are still a good go-to if you need to borrow, though.
You're not asking a dumb question at all! We've seen everything from cash payments to loans. For our project, we mixed a Homestyle loan with cash, plus some DIY work to save on costs. Credit cards and HELOCs are pretty popular too. It’s worth exploring options like contractor financing, especially for larger jobs like HVAC.
Totally agree! The HELOC allows you to use the equity in your home, which can be a smart way to finance improvements if you don’t have sufficient cash upfront.