Best Ways to Finance a Major Home Decoration Project


Many home owners dream of adding something fancy to their homes. A new pool, a backyard deck or even a new paint job for the dining room—all this cost a lot of money. For most, it’s not easy to find the cash necessary for major home improvements. Some people try to save the needed amount little by little. But this can take months or even years. By the time you have the money, the home could have gone into serious disrepair. Here are several other ways you can fund a big home decoration or improvement project:

Home Equity Loan

Often referred to as a second mortgage this type of loan lets you borrow a significant amount of money against the equity (value) of your home. You can borrow up to 80 percent of the existing equity of your home, which should be more than enough for the home decoration project. It’s a fixed rate loan given based on a fixed-term payment plan. Once you receive the loan, you will have to repay the loan in monthly installments in addition to what you have to pay for your primary mortgage. You will need good credit history to apply for one of these. Second mortgages are often preferable to other types of personal loans because the interest rates are generally low because your home is offered as security. Of course, you will have to diligently repay as any delinquency would lead to you losing your home.

Low Interest Credit Cards

If your home improvement project is not so huge enough to be covered by a second mortgage loan you can apply for a low-interest credit card. Use the card to pay for the things or services you need to buy to redecorate your home. You will have to be responsible here and repay the amount due each month diligently. Even low interest credit cards can accrue debt if you are late in submitting monthly payments.

Car Title Loans

If you own a vehicle, you can borrow up to $5,000 or $10,000 by applying for a car title loan. You will obtain the cash by giving up the ownership of your vehicle as collateral. Car title loans typically have to be repaid in 30 days. In some cases, the loan payment plan can be extended to a monthly installment plan. These types of loans are quite easy to obtain as long as you have a vehicle in good condition and a steady source of income. However, interest rates can pile up if you don’t repay the loan back in full as soon as possible.

Construction Loan

Banks offer construction loans to homeowners who might want to make major structural additions to their homes or other properties. These loans are only suited for major home improvement projects. For example, if you are adding an entire wing to your home, you may be able to qualify for one of these loans. On the other hand, if you just want to add a new fire pit to the backyard, you won’t get one of these. Inquire about construction loans from your local bank and learn about the requirements, as there are quite a lot.

You can also borrow the money interest free or at a very low interest rate from a friend or a family. If possible, try to avoid unsecured personal loans. These loans have sky-high interest rates and will most likely sink you in debt.