Connect with us

Hi, what are you looking for?

Finance for Homeowners

HELOC: Best Way To Finance Home Improvements

HELOC home improvements image

There are a number of ways to pay for your next home renovation project, but if you’re a homeowner who’s accrued equity, the best option for a home improvement loan may be with a home equity line of credit (HELOC). This is because while undergoing home repairs, the costs of and timetables for completion of the work are often extremely fluid. You too will need to be nimble throughout the process to stay calm and flexible as original plans morph, and you’ll need to have funding options equally as versatile. A home equity line of credit offers maximum ease and flexibility in drawing money from the HELOC as needed, then paying it back over time.

Reasons why a HELOC may be the best way to finance home improvements

Flexibility of funds

Unlike a home equity loan, which delivers one lump sum amount with repayments that may start immediately, a HELOC offers increased flexibility of funds. The funds from a home equity line of credit can be withdrawn and used as needed, as your home repairs are being completed and invoiced. Maybe for your specific home improvement plan, that means drawing out a lump sum or maybe you will want to access the money over a period of time — the flexibility is real and the choice is yours with a HELOC.

Reduce stress

Home improvements, from a full bathroom remodel to a new roof, fresh coats of paint to new exterior doors, do not always go as planned. There may be contractor delays, difficulty in sourcing materials, weather concerns, as well as other surprises and unforeseen complications leading to unexpected costs once a room is taken down to studs or a roofer gets up there and starts pulling up old shingles. The best way to finance home improvements may be to put some of the equity you have accumulated in your home to work with a HELOC. This is because the money is able to be drawn in spurts, should the cost of the repairs and renovations keep rising.

Gradual withdrawal of money

A HELOC allows homeowners to withdraw money gradually, to pay for their home renovations in stages, as the work is booked and completed. Start with the bathroom now, then move on to the driveway resealing, new roof, etc. During the draw period, you are only using, and starting to repay the interest on, the money needed at each moment. This process could make a HELOC the best way to finance home improvements. 

Variable draw period lengths

There are a variety of draw period lengths available to homeowners applying for a HELOC, making the home equity line of credit ideal for financing a series of home improvements scheduled to take place over a number of months or years. 

Lower, interest-only payments during draw period

Because only the interest on a HELOC is due to be paid back during the draw period, homeowners can use the equity in their house to fund major and minor home repairs without footing the majority of the bill while the work is still being done.

Ready to Use Your Home Equity To Finance Home Improvements?

Finding reliable workers to do your home improvements on time and on budget could be a stressful process, but using a HELOC may make the process of paying for all of the renovations and repairs easier. Use Prosper’s HELOC calculator to see how much home equity you may be able to access.

Read more: How To Get A Home Equity Line of Credit
Read more: 3 Ways to Use a HELOC During Retirement
Read more: How Homeowners Can Prepare for Unexpected Expenses

Join our mailing list


Investor Center

Today we are sharing performance data from the Prosper Portfolio for September 2021. Highlights from the report include: Performance Update In September, approximately 67%...

Credit Management

The consumer finance sector is highly competitive, and consumers often have many options to transfer and repay debt. For example, credit card companies frequently...

Credit Management

For many families, homeownership is an investment for the future. Buying a home is the largest and longest financial commitment most of us will...

Investor Center

Today we are sharing performance data from the Prosper Portfolio for August 2021. Highlights from the report include: Performance Update In August, approximately 67%...

Credit Management

Today, we are excited to announce the release of our new eBook, Your Ultimate Guide to Debt Consolidation, which is now available to download...

Home Renovations

Home renovation can be a challenging process, but financing your renovation doesn’t have to be. There are many ways to fund your home improvements,...

You May Also Like

Credit Management

Unemployed and looking for ways to borrow money? We’ll reveal what options you have when it comes to accessing emergency loans with no job.

Best Practices

Even before COVID, expensive healthcare costs had many Americans wondering what happens if you don’t pay medical bills. If you’re struggling with medical bill...

Financial Literacy

Financial literacy is the know-how to manage your money and plan for your financial future. If you’re not entirely comfortable with money or aren’t...

Finance for Homeowners

Taking out a HELOC to pay off your mortgage is a common practice among many homeowners today. Read more to find out the pros...

© 2005-2021 Prosper Funding LLC. All rights reserved.