Financing a DIY Home Remodeling Project


How to Finance a DIY Home Improvement Project

Credit Score

With a bank loan, first things first. Know your credit score!
Banks use your credit score to determine your interest rate they will charge you. Generally, the higher your score the lower your rate. It will pay to know in advance where you stand with your credit rating. Sometimes there can be incorrect information with the three reporting agencies affecting your score in a negative way.
The best way to obtain your credit score is from the three credit reporting agencies:
1-800-685-1111 www.equifax.com
1 888 397 3742 www.experian.com
1-877-322-8228 www.transunion.com

Bank Loans

For the Do It Yourself - er, I would reccomend using a local bank that you are familiar with. Usually this type of bank will be more apt to offer a remodeling or home improvement loan. Local banks are more in touch with the local economy and the housing market and can therefore work with you more efficiently than an out of town bank would.
If you do decide to go with a bank loan, take care in your choice of loans. The type of loan you choose should be well thought out and depends on your situation. There are many different kinds of loans available such as:
Adjustable Rate Mortgage - Interest rate varies with the economy.
Balloon - Payments towards interest are made throughout loan term with a final large payment at the end of the loan term.
Annual Percentage Rate - Usually a fixed interest rate where payments do not change throughout the loan term.


Pay as You Go

In most cases people aren't ready to take on another loan. As is my case. If you plan on paying for your remodeling suplies as you go, I would reccomend making a list of materials needed for each specific project. Go to your local home centers, discount centers, lumber yards and compare prices. I found that the large home improvement centers are higher priced on their products but do offer convenience shopping along with longer store hours. Lumber yards are probably your best bet for cheapest lumber prices. A little bit of shopping around may save lots of dollars in the end. Most of your price shopping can be accomplished by the web or over the phone to save from driving to all the stores.
Tip: Request a Lowes 10% off coupon for your next project.
Tip: Request a Home Depot 10% off coupon for your next project.
I usually decide on a project, plan for it, save for it, then get it done when I have saved enough money for the project. It works well and saves you the hassle of repaying a bank loan but on the down side can take a while to finish depending on the extent of the project.
Either way you decide to finance your project, good luck!

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