How to Finance a Home Improvement Project: Windows and More

As a Wilmington homeowner, it’s a lot of fun to imagine all the amazing renovations that can improve your home over time. A new deck, energy-efficient replacement windows, a stylish front door – the sky’s the limit! Until, of course, you start thinking about how to pay for it all.

You can finance a home improvement project in several ways, however. In some cases, certain financing options could benefit your credit score, bank account, and renovation schedule at the same time. Let’s explore how best to finance home improvements below.

Before you begin your home improvement project

You might already have fantastic ideas of exactly what you want to add to your Port City home or how you’ll enjoy those improvements once they're finished. But before you start shopping for new windows or break out the hammer and nails, we recommend thinking about two big things first.

Decide your home improvement goals

In the earliest stage of any home renovation project, it’s tempting to keep growing your improvement plans more and more. But the most successful projects are targeted and specific; you should decide your home improvement goals before pursuing any financing.

For example, maybe your windows and your front door both need to be replaced or upgraded. But you might only have the time and financing offers for one of those improvements. Pick which renovation you want most, then set aside the other for a future home update. Deciding your goals early on will prevent your budget from ballooning out of control.

Set a home improvement budget

Speaking of the budget, you should set one as early as possible! It's easier than you think for your home renovation budget to grow much higher than you initially estimated.

Do some preliminary price scouting and determine the average cost for the home improvements you have in mind. Then figure out how much you can save or likely finance based on your credit score, current loans, and other financial metrics.

Once that’s done, you’ll have a basic but flexible budget drawn up. More importantly, you'll know how much you need to get from financing and how much you can spend on your home improvement project out of pocket.

How to finance home improvements

You’ve got a plan and a budget – now, you need the cash to complete your home renovation. If you don’t have the cash saved up to pay for those improvements sooner rather than later, don't sweat it because there are several ways you can get financing for home improvements in Wilmington, NC.

Scout out personal loans for home improvements

A stellar personal loan with a low interest rate and good repayment terms gives you the financial breathing room you need to fund any type of home improvement. If you already have a great relationship with your bank, you might be able to approach them for a personal loan; once you're approved, you can pay down the loan over time each month, just like your mortgage.

Personal loans are fantastic financing options for home improvement projects because they’re available from lots of different sources and can be used for many different things, like redoing your home siding or installing a new roof.

Try a home equity line of credit

On the other hand, you could take out a home equity line of credit (HELOC) instead and use your home’s equity to finance improvements that will raise its value even further.

In a nutshell, a home equity line of credit is similar to a credit card. You can draw up to the maximum amount of credit for your HELOC, spending as much or as little as you need. But unlike a credit card, you only have to make interest payments during the “draw period” of the HELOC (usually 5-10 years). It’s only after the draw period ends that the full repayment period begins (typically 10-20 years).

When you agree to a HELOC, you use a portion of your home’s equity as the collateral for the credit line. Essentially, you borrow “against” your house, which acts as a guarantee of repayment for the lender.

The upside? Home equity lines of credit are often available to homeowners even if they don't have amazing credit scores. Plus, they give you lots of options in terms of how and when you use the money.

All in all, a home equity line of credit is a perfect way to finance a home improvement over several years (think building a new bedroom, expanding the garage or shed, or redoing all the bathrooms from scratch).

Consider a cash-out refinance

There’s another clever way to use your home’s equity to pay for renovations: cash-out refinancing. Cash-out refinancing has you trade mortgages and dip into accumulated equity for extra spending power. How does it work?

With cash-out refinancing, you take out a new mortgage loan for more than you currently owe on your original mortgage. The new mortgage’s funds pay off your original loan balance, and then you make regular monthly payments toward the new mortgage balance. At the same time, you convert some of your equity into cash, which you can then use for whatever you like, such as an expensive home improvement project.

Both cash-out refinancing and HELOCs are popular choices for homeowners with their eyes on value-boosting improvements, like home additions or remodels that make their properties better than before. That's because both of these financing methods pay into themselves – you use equity to add more equity to your Wilmington home!

Look into retailer financing

In many cases, the best window retailers take their services one step further and offer excellent financing opportunities. For instance, Window World’s flexible financing options make it easy to jumpstart your renovation project with an online or in-person application; in just minutes, you’ll receive a decision about your application.

Retailer financing is simple and straightforward, and it can be a great choice if you already know where you’ll get your windows or contractor assistance from. But keep in mind that not every retailer offers financing, so do some research ahead of time!

Ready to start? Get home improvement estimates

Whether you’re thinking of dipping into your home’s equity or securing financing from a bank or credit union, you can’t get started until you begin budgeting. That means getting estimates from local contractors who can provide you with the right renovation products or materials and install your home’s fancy new improvements.

At Window World of the Port City, we make it easy to estimate how much your home renovations will cost and can schedule a consultation or inspection at a time and date that works for you! Request a quote today to begin or visit our showroom to check out our window, door, and other home improvement offerings in person!