Renovating your home improves your happiness, according to a Houzz survey. The most popular home renovation for 2022 is a bathroom makeover. But renovating a bathroom isn’t cheap. Forbes reports that a new bathroom comes with an average price tag of $10,000. So, how do you finance a bathroom renovation without breaking the bank?
Take out an interest-free loan
More than 50% of homeowners plan to renovate their bathrooms this year, according to a recent survey from Zillow. The study also found that homeowners are keen on luxury bathroom features, including curbless showers, heated floors, and free-standing bathtubs. These can all hike up the final price of your bathroom renovation. An affordable way to pay for a new bathroom with features like these is via an interest-free loan. These are short-term loans which must be paid back in a set time (typically between 2 and 5 years). The biggest benefit of this type of loan is that it’s a good budgeting option that won’t cost you any more than the actual cost of your makeover. However, you must ensure you pay the loan back in the agreed time, otherwise you’ll be hit with a big interest rate.
Refinance your home
Homeowners in America saw their home equity grow by $3.2 trillion in quarter 3 of 2021. Tapping into the equity in your home is a good way to get hold of some cash to complete the bathroom renovation of your dreams. If you’re not lucky enough to have a chunk of equity in your home, there are options for you too. The Home Affordable Refinance Program (HARP) is a federal refinance program that allows you to get a new and more affordable home loan. The HARP approval website explains that the program lowers payments and fixes rates. If you qualify and you get your finances sorted, you can use the savings you make towards your new bathroom.
Use cash
Americans have been putting more money into their savings over the past couple of years. It is estimated that they currently have $1.6 trillion in excess savings. These savings could increase further if interest rates in America increase throughout 2022 as projected. If you have some cash set aside, you should seriously consider using it to pay for your bathroom renovation. The benefits of using cash to fund your purchase is that it will help you stay on budget and you’ll avoid interest rates and fees. If your money is tied up in an account where you have to pay a penalty to access it, it’s worth waiting until it becomes available to you free of charge. If this is too far in the future, a 0% interest credit card may be more financially beneficial.
A new bathroom is a priority for many homeowners this year. But before you splash out on a new tub, marble tiles, and luxury lighting, carefully consider how you’ll finance them.