Funding your kitchen remodel can be done through various options, depending on the cost, duration, and goal of the project.
Image, Amy Bartlam
Some common ways are cash-out refinance, home equity line of credit or loan, unsecured personal loan, credit card, and renovation loans. Each option has its own advantages and disadvantages, such as interest rates, loan amounts, repayment terms, and eligibility criteria. Some loans are based on the current equity of the home, while others are based on the future value of the home after renovation.
To finance a kitchen remodel, you can take out a personal loan, open a credit card with a 0% intro APR promotional rate, take cash out while refinancing your home, borrow funds through a home equity loan or HELOC, or take advantage of a federal program like HUD’s 203 (k).
To budget for a kitchen remodel, you can decide how much you can easily afford to repay and build your remodeling plan around that budget. You can ask yourself questions such as how much you can afford to pay for using cash from savings and how much you can afford to borrow.
The pros from the National Kitchen and Bath Association recommend allocating your funds as follows: Cabinetry and Hardware: 29%; Installation: 17%; Appliances and Ventilation: 14%; Countertops: 10%; Flooring: 7%; Lighting: 5%; Walls and Ceilings: 5%; Design Fees: 4%.
To use money from savings to remodel your kitchen, you can decide how much you can easily afford to repay and build your remodeling plan around that budget. You can also try looking for floor model appliances or gently used light fixtures you can install yourself. In small budget kitchen remodels, always keep the base cabinets and keep the sink and appliance locations where they are.
You can liquidate stocks to fund your kitchen remodel. However, there are tax consequences and quirks of timing that you should familiarize yourself with before you call your broker.
That’s it for today! Don’t forget to grab your download and get to working planning your unique kitchen style!
PS – Don’t forget to check out my other kitchen articles like the 30-Day Game Plan for Your Next Kitchen Remodel too!