• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Prosper Blog

Personal Loans Home Equity Line of Credit (HELOC)
  • Blog Home
  • Company News
  • Investor Updates
  • Product Announcements
  • Financial Wellness
  • HELOC

HELOC: Best Way To Finance Home Improvements

September 1, 2020 by Elizabeth Dyer

Best way to finance home improvements, Prosper Blog

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 The funds from a home equity line of credit can be withdrawn and used as needed, as your home repairs are being completed and invoiced.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

Share this post:

Share on Facebook Share on Twitter Share on Reddit Share on Pinterest Share on LinkedIn Share on Email

Financial Wellness, Prosper Blog

Primary Sidebar

Connect with us

Facebook Twitter LinkedIn

For press releases and media inquiries: Prosper in the News or [email protected]

Categories

  • Blog Home
  • Company News
  • Investor Updates
  • Product Announcements
  • Financial Wellness
  • HELOC

Recent Posts

  • What the Extended Tax Deadline Means for You
  • Paying for Childcare and Receiving Childcare Assistance — What to Know
  • How to Apply for a HELOC Online, Plus 5 Benefits of an Online HELOC
  • Saving vs. Investing: What’s the Difference?
  • 13 Ways to Save Money on a Tight Budget

Prosper LoansFollow

Prosper Loans
ProsperLoansProsper Loans@ProsperLoans·
36m

The IRS has extended the federal tax deadline this year, providing more #pandemicrelief to millions of Americans. What does that #extendedtaxdeadline mean for you?

Reply on Twitter 1382694699446767624Retweet on Twitter 1382694699446767624Like on Twitter 1382694699446767624Twitter 1382694699446767624
Load More...
  • Financial Wellness
    Using a HELOC to Pay Off Your Mortgage

    Taking out a HELOC to pay off your mortgage is a common practice among many...

  • Financial Wellness, Prosper Blog
    What Is a HELOC and How Does It Work?

    As a homeowner, you may be wondering: What is a HELOC? Find out everything...

  • Financial Wellness, Prosper Blog
    Medical Bill Debt: What Happens If You Don’t Pay Medical Bills?

    Even before COVID, expensive healthcare costs had many Americans wondering...

  • Financial Wellness, Prosper Blog
    Paying for Childcare and Receiving Childcare Assistance — What to Know

    There’s no other way around it, having a child is expensive. It’s a joyous...

  • Financial Wellness, Prosper Blog
    Emergency Loans With No Job: Options for the Unemployed

    While the unemployment rate in June showed a decline to 11.1%, that ra...

Footer

  • Borrow
  • Invest
  • About Us
  • Press
  • Blog
  • Careers
  • Help Center
  • Contact Us
  • Legal
  • Prospectus
  • Financial Professionals
  • Developers

Prosper and WebBank take your privacy seriously. Please see Prosper's Privacy Policy and WebBank's Privacy Policy for more details. Prosper makes no representations as to the accuracy or completeness of any information provided on this Blog, which is intended for discussion purposes only. Opinions expressed in articles posted to this blog are the author’s own and may not reflect the opinions of Prosper. All personal loans made by WebBank, Member FDIC.

Prosper’s Notes are offered by Prospectus filed with the SEC. Notes are dependent for payment on unsecured loans made to individual borrowers. Notes are not guaranteed or FDIC insured, and investors may lose some or all of the principal invested. Prosper does not verify all information provided by borrowers in listings. Investors should review the Prospectus and carefully consider these and other risks and uncertainties before investing. None of the information provided on this Blog is intended to be investment advice.

Prosper Marketplace, Inc. NMLS#111473 (http://www.nmlsconsumeraccess.org)
All HELOCs are underwritten and issued by our banking partners. Refer to www.prosper.com/heloc for more information. Links to third party sites are provided for your convenience and do not constitute an endorsement.

Equal Housing Lender

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

Copyright © 2021 · Genesis Sample on Genesis Framework · WordPress · Log in

Go to mobile version