When we first talk with potential clients one of the first questions we have to ask is about their budget. We do this for so many reasons. First we want to know if the project they have described to us is being allotted a realistic amount to finish the project. I typically don’t ask where the money is coming from, that’s really none of my business as long as there is enough to get  the job done.

I do find once we have started the clients then start to get their funding options aligned. Generally you want to do this before you start planning a renovation. That will essentially set your budget for you. But where do you start?

This article on Zillow pretty much nailed it.

1. Refinance Your Mortgage

Refinancing your home is one way you can stash away extra cash every month to pay for home renovations. Depending on your current interest rate, you might be able to refinance at a lower interest rate and/or for a longer loan term, which would lower your monthly mortgage payment. So, you could set aside the difference until you’re ready to jump into renovations.

If you have enough equity in your home, an even faster way to get your refinance to pay for your next big project is with a cash-out refinance. Going this route, you refinance your existing loan for a new loan with an amount that’s higher than the amount you owe. That way, you pay off your original mortgage and have cash left over to remodel your home to your heart’s content.

It’s a big decision to refinance your mortgage, and of course you’ll want to consider the cost of the refinance to see if it’s worth it in the long run. To help decide if refinancing is right for you, try our refinance calculator to estimate your savings, and then check the latest refinance rates from multiple lenders, anonymously.

2. Get a Home Equity Line of Credit (HELOC)

If you already have a low rate on your first mortgage, or you’ve already paid off your loan, refinancing may not make sense for you. However, a HELOC is an option to tap into your equity to pay for a home renovation without refinancing. It works a lot like a credit card in the sense that it has a set limit that you can borrow against. However, since the loan is secured by your home, you’ll get a much lower interest rate than a credit card. A HELOC is typically an adjustable rate loan but will allow for fixed-rate advance options if you prefer the stability of a rate that won’t change.

One of the biggest benefits to HELOCs in the past has been that the interest paid on the HELOC is tax deductible up to $100,000. However, under the recently passed tax law, interest free HELOCs come with a few stipulations, with the most notable circumstance being that the money is used to pay for home improvements. And that’s good news for you if you’re planning on using this money to pay for your next home improvement project.

3. Take Out a Home Equity Loan

A home equity loan is another option for homeowners to tap into their equity to pay for renovations without refinancing their entire mortgage. Unlike a HELOC, which is a line of credit that you can borrow against as needed, this type of loan requires you to take out all the cash at one time. But since it is a fixed rate loan, the interest rate on a home equity loan is typically higher than an adjustable rate of a HELOC. Home equity loans are also commonly called “second mortgages” because many homeowners get them in addition to their first mortgage. However, you don’t need a first mortgage to get a home equity loan.

It can be a tough choice to decide whether a home equity loan, cash-out refinance, or HELOC is best for you. As with any new loan, consult with a lender to see which one makes the most sense for you.

4. Crowdsource

If one of the more traditional routes doesn’t sound right for you, the good ole bank of your parent(s) may be able to help get you the jump start you need to fund your new renovations. That is if they have the means, of course. Whether it’s in the form of a loan or a gift, tapping into some family funds could be one way to save up!

If the bank of your folks has run dry, extended family or even friends can be helpful. Particularly if you’re just getting married, try asking your guests for cash towards your remodel as wedding gift instead of something from a registry.

5. Get Creative with Earning More Cash

Although it might not be ideal for some, having a side hustle in addition to your regular 9 to 5 could help you save more money faster. The good news is, there are many ways you can get creative with earning more money.

If you have extra space in your home, renting out a bedroom to a roommate — or even to travelers a couple times a month – could help you garner some extra cash.

Have an extra parking spot in your driveway? Depending on where you live, people may be willing to pay to park their car in your empty spot. The same goes for other unused spaces, like garages or sheds. Storage units through traditional establishments can get pricey but you might be able to rent out your space to a trusted neighbor.

Commute to work by some other means besides your car? If so, there are services available that can help find someone willing to rent your car for a day or even weeks at a time. Speaking of driving, signing up as a driver for car-sharing apps might be a good way to rack up some extra cash for those home improvements.

And if driving isn’t your thing or you don’t want strangers in your home, you could always try less invasive ways to make extra money like dog walking, house sitting or selling handmade crafts online or to co-workers and friends.

6. Get Serious About Saving

Although it can take some time, saving up the old-fashioned way is still one of the most common ways people are funding their home improvements. If you’re able to cut costs elsewhere or spend less money on non-essentials and actually set money away in a home improvement fund, you might find that it adds up quicker than you think!

If you’re looking for an easy way to save money, take a look at your current expenses and see where you can cut back. One place to start would be to look at the automatic payments you’re making every month to non-necessities (like the various television or music apps you’re subscribed to) and see if you can live without them.