Updating your home’s kitchen or master bathroom can increase the value of your property. A home could also be worth more if it has a finished basement or attic. However, before you can go about improving your house, you will need to figure out a way to pay for it. If you are new to the home renovating scene and don’t know where to start, here are 4 ways to save for your next big home makeover.
Save Up the Cash Over Time
If you don’t have to engage in a home improvement project right away, it may be possible to save up for a new bathroom or kitchen. Paying for a home improvement project in cash can be ideal for those who don’t want to go into debt for something that they don’t absolutely need. In addition to saving a portion of each paycheck, you can use a tax refund, bonus check or a gift to finance a home upgrade.
Apply for a Loan
A bank loan may allow you to upgrade your home today and pay for it over a period of weeks, months or years. Banks are generally willing to lend money for projects that will increase the value of a home or other significant asset. If you have sufficient equity in your home, a financial institution may allow you to borrow against that equity. In such a scenario, your house is used as collateral, and this means that you’ll likely pay a lower interest rate.
Use Retirement Savings
Money in an IRA or 401(k) could be made available to help pay for the cost of upgrading your property. In some cases, you may be able to take a loan from a 401(k), as opposed to withdrawing the money directly from the account. One of the benefits of a 401(k) loan is that you are paying yourself back with interest, which can help your retirement account grow faster.
Cutting Costs Is Equivalent to Saving Money
Buying salvaged materials can drastically reduce the overall cost of a home improvement project. If you have any friends or family members who are contractors, they may be able to help you source materials for less. In some cases, they may be willing to help with the project for free or at a reduced rate.
As a homeowner, it is important that you take steps to keep it looking and functioning its best. Putting on a new roof, painting the living room or putting in new appliances are all things that you can do to make a house more comfortable and increase its value at the same time.