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Your dream kitchen is within reach. You've got the design plans, you've chosen your contractor, and you're ready to transform your Columbus home. There's just one question left: How are you going to pay for it?
If you're like most homeowners, you don't have $30,000 to $80,000 sitting in your checking account waiting to fund a major
Let's explore the most popular financing routes for home renovations, along with their advantages and potential drawbacks.
A home equity loan allows you to borrow against the equity you've built in your home, receiving the funds as a one-time lump sum. Often called a "second mortgage," these loans typically come with fixed interest rates and predictable monthly payments.
Pros:
Fixed interest rates mean your monthly payment stays the same throughout the loan term, making budgeting straightforward
Lower interest rates compared to personal loans or credit cards, since your home serves as collateral
Tax deductibility potential if the renovation substantially improves your home (consult your tax advisor)
Large borrowing amounts available, typically up to 85% of your home equity
Cons:
Your home is collateral, putting it at risk if you can't make payments
Closing costs can range from 2-5% of the loan amount
Fixed payment schedule means you're paying interest on the full amount immediately, even if your renovation happens in phases
Approval process can take several weeks
Best for: Homeowners with substantial equity who need a large, predetermined amount for a complete renovation project.
A HELOC functions more like a credit card than a traditional loan. You're approved for a credit line that you can draw from as needed during a set period (usually 5-10 years), paying interest only on what you use.
Pros:
Pay interest only on what you borrow, making it ideal for phased renovations
Flexibility to access funds as your project progresses
Interest-only payments during the draw period can ease your budget initially
Reusable credit line as you pay down the balance
Cons:
Variable interest rates mean your payments can increase if rates rise
Payment shock when the draw period ends and you must start repaying principal
Temptation to overborrow since funds are readily available
Closing costs similar to home equity loans, though some lenders waive them
Best for: Homeowners planning renovations in stages or those who want flexibility in accessing funds over time.
Personal loans don't require your home as collateral and can be approved quickly, often within a few days. They're ideal for smaller to mid-sized renovation projects like a bathroom remodel.
Pros:
No collateral required, so your home isn't at risk
Fast approval and funding, sometimes within 24-48 hours
Fixed rates and terms provide payment predictability
No closing costs in most cases
Cons:
Higher interest rates than secured loans, typically ranging from 6-36% depending on your credit
Lower borrowing limits, usually capped at $50,000-$100,000
Shorter repayment terms (typically 3-7 years) mean higher monthly payments
Credit score dependent – rates vary significantly based on your creditworthiness
Best for: Homeowners with good credit scores who need smaller amounts quickly or don't want to use their home as collateral.
Cash-out refinancing replaces your existing mortgage with a new, larger one, giving you the difference in cash. This option makes the most sense when current mortgage rates are lower than your existing rate.
Pros:
Single monthly payment instead of managing multiple loans
Potentially lower interest rate than your current mortgage (if rates have dropped)
Large sums available based on your home equity
Extended repayment period spreads costs over 15-30 years
Cons:
Resets your mortgage clock, potentially extending the time until you own your home outright
Significant closing costs (2-6% of the new loan amount)
Only beneficial if new rates are competitive with your current rate
Lengthy approval process similar to getting your original mortgage
Best for: Homeowners with high-interest mortgages who can secure better rates while funding their renovation.
Many contractors, including Fresh Home, partner with financing companies to offer convenient payment options directly through the renovation process. At Fresh Home, we work with Acorn Finance to provide our Central Ohio clients with competitive financing solutions tailored to home improvement projects.
Whether you're planning a complete kitchen transformation, a luxurious bathroom upgrade, or a commercial property renovation, our financing partnership makes it easier to move forward with confidence.
Pros:
Simplified process – often integrated into your project planning
Quick prequalification without impacting your credit score
Multiple lender options through a single application with Acorn Finance
Renovation-specific terms designed for home improvement projects
Promotional offers may include deferred interest or reduced rates for qualified buyers
Seamless coordination between your Fresh Home project manager and financing partner
Cons:
May not offer the absolute lowest rates compared to shopping around independently
Terms vary based on creditworthiness
Promotional periods require careful attention to avoid deferred interest charges
Best for: Homeowners who want convenience and prefer to handle financing as part of their contractor relationship.
Selecting the best financing method depends on several factors:
Consider home equity options (loans or HELOCs) if:
You have at least 15-20% equity in your home
You're planning a major renovation costing $30,000+
You want the lowest possible interest rates
You're comfortable using your home as collateral
Consider personal loans if:
Your project costs under $50,000
You need funds quickly
You have excellent credit
You prefer not to use your home as collateral
Consider cash-out refinancing if:
Current mortgage rates are lower than your existing rate
You're planning extensive renovations
You don't mind resetting your mortgage term
You want to consolidate other debts simultaneously
Consider contractor financing through Acorn Finance if:
You want a streamlined application process
You prefer consolidating your renovation and financing decisions
You value working with a financing partner familiar with home improvement projects
You're already working with Fresh Home on your renovation project
The right financing option can turn your renovation from a distant dream into an imminent reality. At Fresh Home, we understand that figuring out how to pay for your project can feel overwhelming. That's why we've partnered with Acorn Finance to make the financing process as smooth as the renovation itself.
Whether you're planning a complete kitchen overhaul, a bathroom transformation, or a commercial property upgrade in Central Ohio, we're here to help you navigate both the design and financial aspects of your project.
Our team has helped hundreds of Central Ohio homeowners and businesses bring their renovation visions to life. From the initial consultation through final walkthrough, we're committed to transparency, quality craftsmanship, and your complete satisfaction.
Ready to discuss your renovation and explore your financing options? Contact Fresh Home today for a free consultation, or request a detailed estimate for your project. We'll help you create a beautiful space that fits both your vision and your budget.
Browse our portfolio of completed projects to see the quality and craftsmanship that sets Fresh Home apart. From stunning kitchen makeovers to complete home transformations, we've been helping Central Ohio homeowners create spaces they love since 2010.
Disclaimer: This article provides general information about financing options and should not be considered financial advice. Interest rates, terms, and eligibility vary by lender and individual circumstances. Consult with a financial advisor to determine the best option for your specific situation.
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