We know that your home is a special place, but even the most beloved or desired places need a renovation. If you are dreaming of doing a comprehensive renovation to transform your space and you have wondered how to finance a renovation, we are here to help you overcome the challenge of finding the necessary financial resources. In this blog, we bring you different renovation financing options that will allow you to make your project a reality without compromising your personal finances.
Find out how to get the money you need to carry out that renovation you want so much. Together, we will make your home an even more special place!
Relevant aspects when knowing how to finance a renovation
When considering different options to finance the renovation of a home, it is important to take into account the following:
Evaluate the cost
Before looking at financing options, it is essential to have a clear budget estimate of the reform. Consider the following points:
Detailed budget estimate
Break down the costs involved, including materials, labor, and additional expenses. Get quotes from different vendors and professionals to compare and make informed decisions.
Prioritizing needs
Identify the priority needs of your renovation. Focus on the essentials which will provide a greater benefit in terms of value and comfort. You can postpone or modify secondary aspects to fit the available budget.
6 options to finance your home
Before you start renovating, you should explore the various alternatives to finance your renovation. Here are some popular options:
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Mortgage extension
If you already have a mortgage, you may want to consider extending it. Al solicitar más dinero al banco, podrás Include the cost of the renovation in the mortgage loan. Esto te brinda una única cuota mensual y tasas de interés más bajas en comparación con otros préstamos.
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Personal loans
Personal loans are a common alternative for financing home renovations. You can Obtain a specific sum of money and pay it back in installments over a certain period. Research different financial institutions to compare conditions and select the most favorable option.
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Mortgage Line of Credit
Another option to consider is a line of credit to finance your renovation, where you can use the equity in your property as collateral to obtain financing. Evaluate the requirements and benefits of this alternative before making a decision. (Source: BBVA Blog)
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Renovation financing by the contractor
In some cases, the contractor himself may offer financing for the renovation. You can negotiate a payment schedule based on dates or progress in the work. It is important to note that this type of financing often involves the use of bills of exchange that can be discounted by the builder’s bank.
When you are wondering how to finance a home renovation, you can also consider reinforcing your guarantees with a bank guarantee to obtain optimal financial conditions in terms of amount, terms and costs.
In addition, the contractor can act as a prescriber and help you obtain financing through a Financial Credit Establishment to finance your renovation or by introducing you to a bank they usually work with. Remember that Linked loan regulations can be beneficial in these types of situations.
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Own savings
If you have previous savings, consider using some of those funds to finance your renovation. Use your own savings It will help you reduce the amount you need to borrow and give you more flexibility when choosing a renovation financing option. Evalúa cuánto puedes destinar de tus ahorros a la reforma sin comprometer tu seguridad financiera a largo plazo.
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Credit card
Before resorting to bank loans, you can consider the option of using a credit card. However, be careful with deferrals, as they tend to have high costs. Some establishments offer free short-term financing with their own cards (e.g. 3 or 6 months).
Evaluate the conditions and choose the option that best suits your needs. Lógicamente, para el caso de una reforma integral, cuyos importes son bastante más elevados que el gasto que habitualmente se suele hacer con una tarjeta de crédito, quizás esta opción se te quede corta.
Planning and negotiation phase to get financing for your home
In addition to financing, within the phases of a renovation, planning and negotiation are key. Therefore, it is important to consider the following aspects:
Negotiation with suppliers and professionals
When hiring suppliers and professionals for your renovation, don’t forget to negotiate prices and conditions. Get detailed quotes and compares the quality of the work offered. Establish clear contracts to ensure agreements are properly enforced.
Pre-Savings
If you have time before you start the renovation, consider saving some of the money you need. Save in advance It will allow you to reduce the amount you need to finance and give you greater flexibility to choose the most convenient financing option.
Professional advice
If you have questions about financing options or need more specific guidance, consider seeking professional advice. The financial experts They will be able to analyze your situation and offer you personalized recommendations.
At this point, you should have more or less a clear idea of how to finance a renovation. Explore the different financing options, assess your financial needs and capabilities, and plan each stage of the process appropriately. Remember that the key is to make informed decisions and find the balance between your dreams of renewal and your financial responsibilities.
At Kaleidoscope we understand that undertaking a comprehensive renovation of your home and finding the right financing can be a challenge.
However, we are here to accompany you every step of the way, including, of course, negotiating with suppliers or recommending different financing providers. Our extensive experience in the real estate sector allows us to provide you with comprehensive advice, from guidance through bureaucratic procedures to project design and budgeting.
We are committed to helping you make your dream home a reality. Don’t hesitate to contact us and start this exciting journey together!
You can also try to value your project in our free quote tool through the following link:
