How to Fund Your Next Home Repair or Renovation Project

  • A 2022 study shows that homeowners spent a median of $22,000 on renovations.
  • Funding options are available for financing a home project, such as equity loans, credit cards, and refinancing your mortgage.
  • Knowing your project timeline and equity can help you choose the best option for you.

Owning a home comes with inevitable repairs or the desire to give your space an upgrade. A recent study revealed that in 2022, homeowners spent a median of $22,000 on renovations, with more than 50% of them planning to spend at least $15,000 on upgrades.

But don’t let the cost of these projects scare you away. Plenty of funding options are available that can make all the difference in bringing any home renovation or repair to life, from a kitchen remodel to a roof replacement or water damage repair. Navy Federal Credit Union, for example, offers various options for its members depending on the scale of their home project.

“We always tell our members to consider their renovation goals and current financial situation,” said Adam Fingerman, assistant vice president of equity lending at Navy Federal. “Then, we’ll help them narrow down the options to find the right financing product to fit their needs.”

Here are some of the most suitable funding options for any home renovation project.

1. Loans can fund big and small home projects

There are various loans that suit different types of projects. Fingerman suggests starting your project by getting an estimate of the scope of work, the timeline, and the costs. Those factors can help you decide which loan makes the most sense for your renovation or repair.

2. Home equity line of credit (HELOC) is a flexible option for large projects

A home equity line of credit, which has a variable rate, allows you to use the equity in your home as collateral to borrow money on an as-needed basis, up to your credit limit. This is a good option if you expect to have ongoing home improvement projects. 

3. Home equity loans fund a one-time project

A home equity loan provides a one-time lump sum of funding by borrowing against the equity in your home. This is best for a larger-scale, one-time project that requires a specific amount of financing such as a pool, efficiency upgrade, or renovating a single room. Because you take out all the funds upfront, you’re able to plan your project with a clear budget in mind. Additionally, this option comes with a fixed interest rate for the entire duration of the loan.

4. Refinance your home to pay for a project

A cash-out refinance is a mortgage option that allows you to borrow extra money by refinancing your existing mortgage and tapping into your accumulated home equity.

5. Home improvement loans provide capital for planned repairs

A home improvement loan offers funding upfront without the need for collateral. Payments are set at a fixed rate, providing stability and predictability throughout the repayment period. Best of all, at Navy Federal, you can typically receive funding on the same day you apply, making it an excellent option for efficiency upgrades or remodels like landscaping or yard overhauls. 

6. Personal expense loans fund urgent repairs

Personal expense loans are useful for funding time-sensitive home expenses because they typically have a faster application process than other loans. This is helpful for “a broader set of home-related expenses and when you need money quickly,” Fingerman said.

7. Consider using a credit card for smaller projects

“While most people don’t think to leverage credit cards for funding home improvement projects, these can be another financing option for homeowners,” Fingerman said.

He suggested using these for small projects that you can pay off quickly. Additionally, by using a rewards credit card, you can earn rewards and points for your purchases.

For example, the Navy Federal Flagship Rewards Credit Card could be a good option for day-to-day or smaller purchases, as you’ll earn points when you spend. Navy Federal’s non-rewards Platinum Credit Card is another credit card option for bigger home projects or emergency repairs as it features their lowest available credit card APR.

Your home can be a smart investment

Consider what’s happening at both a national and regional level in the market. Know what kinds of home improvements are truly adding resale value and are attractive to potential buyers should you choose to sell in the future. Ultimately, it’s important to not spend more than you can afford.

“Navy Federal offers mortgages with 100% financing options, rate match guarantee, and no private mortgage insurance (PMI) required, among other benefits,” Fingerman said. “Additionally, we stick with you for the life of your loan — ensuring our services are available to you whenever you need it.”

Discover more about these funding options by visiting Navy Federal Credit Union’s Home Project Financing Center here.

This sponsored post was created by Insider Studios with Navy Federal Credit Union.

Navy Federal Credit Union is federally insured by NCUA. Equal Housing Lender.