Ways Homeowners Can Pay for a Major Kitchen Overhaul

ingredients near the kitchen sink

If given a chance to give your home a makeover, which area would you choose to update? If you want to make a significant change, then you might want to consider a major kitchen renovation. You may get inspired after seeing model kitchen countertops sold in Salt Lake City. Or maybe you’ve been longing to update your appliances or invest in new kitchen cabinets. By choosing the right projects, you can enjoy tons of perks.

For instance, you can enhance the comfort and functionality of your kitchen. Such a project can give our home a modern upgrade. You can even increase your home’s energy efficiency and boost its value. But most of us lack the funds needed to renovate. This is why many choose to forego their plans for improving their kitchen. The good news is that homeowners now have many financing options to choose from to make their dream kitchen renovation into a reality.

Personal Loan

Homeowners who are in need of a lump sum of cash for whatever purpose can apply for a personal loan. This means that you can also use a personal loan in Utah to fund your major kitchen renovation, including a kitchen countertop replacement. With a personal loan, one does not necessarily need to have collateral to qualify for the loan. You’ll need to have a good credit score and stable employment and income to avail a personal loan. This is an excellent choice for those who don’t have enough equity or doesn’t want to use their home as collateral.

Home Equity Loan

For those homeowners who have enough equity in their homes, you can choose to apply for a home equity loan. You can check this using a home equity loan calculator. This means that you’ll be using your home as collateral for the loan. If approved, you get to receive a lump sum of cash that you can use for your major kitchen renovation.

HELOC message on the phone

Home Equity Line of Credit

Also known as HELOC, this type of loan allows homeowners to tap up to 80% of your home equity. There is a draw period, which is usually up to 10 years and a repayment period of 15 years. You get to draw a certain amount of cash whenever you need the funds.

Contractor Financing

Some contractors also offer to finance to homeowners wanting to renovate but lack the funds to do so. This means that if you opt for a contractor financing, it can mean one of two things. One is that your contractor will also be your lender. It could also mean that your contractor is using a third-party lender, and they will be the ones to finance the renovation.

If you choose any of these four, make sure that you weigh the pros and cons. Each financing option comes with their own risks. They also have varying interest rates, monthly payments, and loan terms. Some lenders may require you to pay upfront fees, including an origination fee, before they release the funds. There are also those who charge prepayment penalties if you choose to repay your lender early.

There are other options you can choose from that can help you finance your dream kitchen makeover. Know what available options you have, shop for lenders, and make sure to borrow only the amount you need. Stick to your budget and craft a plan before starting the project.