August 14, 2017

Upgrading your kitchen or sprucing up the backyard is a nice way to make your house your own and potentially increase its value. Although rewarding, home improvement projects can often be costly. Here are several ways for you to finance your plan.


Putting away money is a great way to pay for home improvements. Using your 1st United Money Manager within online banking, you can set a goal and receive notifications as you build your savings and reach those goals.  Out of sight is often out of mind – to safeguard your best intentions to save, we recommend opening a second savings account and setting up automated transfers monthly or on pay days. This will allow your savings to grow effortlessly.

Home Equity Loan or Line of Credit

If you don’t have the cash and aren’t able to save, you may consider borrowing the money with a low-cost loan secured by the equity in your home. There are two ways to access this home equity to pay for improvements – a home equity loan or a home equity line of credit. 

A home equity loan is a fixed-rate, fixed payment loan, which makes it simpler for you to budget accordingly. You choose the amount you want to borrow up to a percentage of your available equity and you can use the money any way you wish. This option benefits you most if you plan to use the money in a lump sum for a one-time expense.

A home equity line of credit (HELOC) has a variable-rate and works more like a credit card, allowing you to take money out as you need it. A HELOC is a good choice if you plan to use your equity periodically, for example, in an ongoing home improvement project.

Fixed-Rate Personal Loan

If you don’t have enough equity in your home or don’t wish to pull from your equity, a personal loan might be an option. While personal loan rates may not be as low as a home equity loan or line of credit, they are still considered competitive and offer flexible terms, so you should be able to find a payment that fits your budget. Personal loan funds can be used however you’d like and are ideal for a one-time, lump sum expense.

Credit Card

If you have a small project, consider using a low-interest credit card or promotional rate credit card offer. Be sure you read the fine print on the offer so you understand your interest rate and payment terms to determine if this is the best option for you. Savvy borrowers set a goal to pay off the balance before the special rate expires.

What’s Best for You?

As you can see, there are many options to paying for a home improvement.

It’s also recommended to consult with a Realtor who is familiar with your neighborhood to determine if your planned improvement will pay off at the time of sale. This information may help you better plan your home improvement project and you’ll thank yourself later on if you decide you need to sell.