Home Remodeling Loans: Should you get one?

Home remodeling loans or saving up/using your savings for a remodeling job? These are two choices that have different pros and cons. It actually depends on your needs, wants, and finances.

Not everyone has a couple of thousand dollars lying around. Some people would rather spend these savings for additional capital for their business. In the first place, a loan will improve your cash flow by giving you access to more capital.  Since, entrepreneurs see a home as a dead asset or an essential liability, spending a lot of hard cash on home renovations is deemed unwise.

homer remodeling loans interests

Depending on how much money you can borrow, getting a loan will also give you access to more funds for your home remodeling plans. It means you don’t need to be too stringent on the materials and appliances you want. Budget compromises coupled with incompetent contractors are often the reason for poor quality results. However, getting a loan will always be the riskier option — which can also be controlled through efficient financial planning.

On the other hand, using your savings is usually a better option if you want to save money. It will force you to work within your budget and would stop you from emotional spending. You don’t put yourself in debt and that will put your mind at ease.


An FHA 203k loan, in New Jersey, may be the perfect loan for you; it’s a home improvement loan available through the FHA. The 203k loan allows a borrower to take a 30 year fixed NJ mortgage and improve their current residence, or renovate a home to purchase. With a 203k loan, you can finance up to 110% of the After-Improved Value.

Improvements Allowable Through The FHA 203k Program Include:

  • Room Additions
  • Bathrooms
  • Kitchens
  • Windows
  • Roofing and Siding
  • New Furnace or Central Air Conditioning
Source: https://www.sqf.net/construction-loans

Personal Loans

Home improvement loans can deliver money fast to your bank account. Additionally, you’ll pay it back with predictable, fixed monthly payments and without worrying about collateral. Depending on your bank or lender, you might get lesser fees or none at all.

However, one disadvantage of personal loans is that they might get higher interest rates than home equity loans. That’s because the rate will be based on a mix of factors, like the amount of money you want to borrow, your income, credit score, and how much debt you carry compared to your income.

Either way, you would need to find a contractor to help you create an estimate for your home improvements. At AHR Design Solutions, we can even give you sound recommendations or point you to reliable individuals who can help you with your financial decisions. If you are ready to improve your home, don’t hesitate to call at +1 732-290-1119 or contact us by filling out a form. You can also visit our portfolio on HOUZZ.