There are lots of ways to borrow money for your remodel. Think before you sign, though, as interest rates vary depending on whether you have collateral to back up the loan. If you own your own home, it can serve as your collateral. Here are some of the basic ways you can finance your remodel.



    • Home Equity Loan – based on the money you have paid into your home, it’s a fixed rate and a fixed payment, with a lower interest rate.

    • Home Equity Line of Credit – again, secured by your home and how much of it you own, but it works like a credit card. You borrow when you want and pay back as you go.

    • Personal Loan – based on your credit, not your assets. The interest rates are higher and the terms are fixed.

    • Home Improvement Loans – come with a higher rate but will let you get that work done. Some banks even offer a home improvement line of credit for more flexible borrowing.

    • Refinancing – you could roll the cost of the remodel into a new mortgage, especially if you can get a low interest rate.

Remember that home mortgages and home equity loans and lines of credit have tax advantages, but personal and home improvement loans do not. Either way, the options are there, but you’ll want to sharpen your pencil to get the best deal.