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Financing Options For Kitchen Remodeling

Kitchen remodeling is a common goal for many homeowners. They want to make their kitchens more attractive and efficient, and that usually means making some substantial changes. In some instances, these changes might even be necessary because the kitchen is outdated, or it has some structural issues that need addressing.

In most cases, the sticking point is the money. Remodeling a kitchen is a serious investment, even though the value added to the home is worth the expense in the long run. The trick is to figure a way to get the money needed to carry out kitchen remodeling without cutting corners or making serious compromises in the quality of the materials and the work.

The obvious solution is to wait until you have put aside enough money to carry out the project. If this is not possible, or you are not willing to wait, then you might want to think about getting a loan. This makes sense, especially if you are planning to sell your home soon, as it will enable you to get a better price.

Even if you are not planning to sell, it still makes sense to take the plunge for your personal benefit. A beautiful and functional kitchen, where you probably spend most of your time awake, will make you feel more content and happier in your home. If you are happy at home, you feel more fulfilled overall. This can help you advance in your career, nurture relationships, and be a better person.
If these sound like something you want, then you should know more about your financing options for kitchen remodeling. This will help you choose
the one with which you feel most comfortable.

Unsecured loans

An unsecured loan is one that does not require collateral. The most common type of unsecured loan is a credit card, which is essentially a loan instrument available on demand. The amount you can borrow will depend on your credit rating. However, you should keep it to $10,000 or less.
Because you did not put up anything as collateral, a credit card company does not have any way to get their money back if you choose not to pay. Your credit rating will suffer, but that will not help the company recover their losses.
The risk they take in lending you money is why credit cards have high interest rates, and why it is a good idea to pay it back as soon as possible. In fact, you should use your credit card if you anticipate that you can pay your credit card bill in full by the time your due date comes around. That way, you will not have to pay any interest at all.

However, if this is not the case, using your credit card is still a good idea if you only need a small amount, and you have a good credit rating. Credit card companies often offer lower interest rates for installments to clients with good credit, sometimes as low as 2% a month. It’s still a whopping 36% over 18 months, but not bad if you get your dream kitchen in exchange.
Keep in mind that credit card loans carry hefty fees if you fail to pay on time or miss a payment. Make sure you pay off the loan on time, and avoid using that card for other purchases, as this will add to your revolving credit interest charges. Any interest and other charges you pay for this type of loan is not tax deductible.

Personal loans

A personal loan is also a type of unsecured loan available through banks and credit unions. If your remodeling cost is likely to go beyond $10,000, this is a better option than credit cards because you can get a larger amount over a longer term and they usually have lower interest rates than credit cards. The interest rates vary greatly from lender to lender, however, so make sure you shop around. The range is from a low of 6% to a high of 36% per annul.

A personal loan is a good idea if you have a great to outstanding credit score as a lender is more likely to offer good terms for your loan. You can ask for longer terms if you are asking for a big amount, so your monthly payments are manageable.
The problem with personal loans is you must wait longer to get approval. You must submit documents when applying for one, and this can be a hassle if you are applying with several lenders. However, you should have no difficulty in getting approval if you have good credit, so it is worth the time and effort to negotiate the best terms from the best lenders. You should not have to pay for closing or other fees, either. Note that there are no tax benefits from this type of loan.

Secured loan – Home equity

Another financing option you might want to consider is a secured loan using your home equity as collateral. This is only an option if you have full ownership of your home, or you are far enough along in your mortgage payments that you have equity. Since it is a secured loan, the lender can foreclose on your home if you fail to pay the loan in full.

A secured loan using home equity for your kitchen remodeling is a great idea because you can get more money, pay it back over a longer period, and pay much lower interest rates that you can deduct from your taxes besides. You have several options when it comes to this type of loan. These include taking out a second mortgage, refinancing, or getting a home equity line of credit (HELOC).
When you do apply for a secured loan, do not hesitate to tell them the reason for it. They would be happy to learn you are remodeling your kitchen, as this means better value for the security they hold you home. This might even help you get better terms.
The downside to secured loans is you must jump through more hoops during the application process than an unsecured loan. You must pay additional costs such as closing fees if you do get approval.

If you are going the second mortgage route, it means you are getting another loan on top of your original loan, so you must make two mortgage payments for the same house. The amount you can get for a second mortgage will depend on the ratio of the value of your home and any equity you have.

For HELOC, you should know that lenders would only give about 75% of the value of the home or equity as the loan amount. If you have equity of $50,000, for instance, you can only qualify for a loan of $35,000.
For refinancing, you need to borrow enough to pay off any balance on your original mortgage plus your remodeling cost. If you still owe $20,000 on your original mortgage and need $35,000 for your remodel, then you must borrow $55,000.


You have several financial options for kitchen remodeling, and each one discussed here have its merits. What you must decide is how much work you are willing to put into getting a loan and how much interest you are willing to pay. This will depend greatly on how much you need to remodel your kitchen. Fairfax Kitchen Bath can give you a free estimate for the kitchen you will love for life.

Fairfax Kitchen Bath services the DC, MD and Northern Virginia metropolitan areas. We are a Class A, licensed and insured contractor, registered in the Commonwealth of Virginia. We have a showroom in Fairfax, Virginia, which houses all our products.
We sell only top-quality products for all your kitchen renovation needs, from natural and engineered stone slabs, cabinets, shelves, sinks, faucets tiles, backsplashes, knobs and pulls, and hardwood flooring. We carry only the top brands for these products, such as Schrock Cabinetry, Silestone, Blanco, Kohler, and Mosaic Décor.

Contact us today to get free in-home design consultation and quote for your home and kitchen remodeling!

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Picture of Sam Kazanci <br/><span id="position">Owner</span>
Sam Kazanci

Sam Kazanci is the owner of Fairfax Kitchen Bath Remodeling. He has experience to build and remodel the kitchen and baths with his team and the author of fkb blog: You can find Sam on LinkedIn and Twitter.