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4 Alternatives to a Home Renovation Loan

4 Alternatives to a Home Renovation Loan

Aug 03, 2021

Whether you have an obvious fixer-upper or a house with just a few out-of-date elements, many homeowners start to wonder about home renovation loans. But we want to show you a few other options that may be better options, and why.

How Much Can I Get a Home Renovation Loan For?

According to NerdWallet, borrowers can expect lenders to offer home renovation loans for as much as $100,000 and set up repayments on a designated day each month.

What is a Good Home Renovation Loan Rate?

While it’s a wide range, Bankrate reports 3% to 36% for the average home renovation loan rate as of August 4th, 2021 with the primary factor being a borrower’s credit score. Obviously, the difference between paying 3% and 36% APR on a $100,000 loan is MASSIVE (the math works out to a 33k difference per year, or approximately the price of a 2024 Hyundai Tucson Hybrid). But let’s say your credit is good to great. We’ll narrow that range to a good ways below its average (say 10% APR) and assume you aren’t planning to borrow 100,000 big ones (let’s say $20k instead — keeping in mind that home renovation costs are always more than you think).

At that rate and dollar amount you’ll still be paying $2,000 in interest per year.

A torn up home in the middle of a renovation project with a traffic come and exposed brick.

5 Ways to Dodge High Home Renovation Loan Rates

A home renovation loan may not be your best option for the updates your home needs. It’s worth considering all of your options for such a big project. Here are a few that may be a better fit for your family life, financial wellbeing, and/or ability to sell quickly.

Sell As-Is While the Market’s Still Hot

If you have a move-in ready home and you’re looking to sell, the market is on your side. Unfortunately, most homes are not move-in ready, despite what we may think.


  • Potential for high return in a seller’s market
  • Potential for a bidding war


  • A good sale price usually relies on a space being move-in ready. Hot markets mostly apply to move-in ready homes.
  • Realtor commission fees and closing costs

Hire a Renovation Contractor

If your home isn’t move-in ready, hiring a renovation contractor can definitely help get your home to that point. The big variable is how much time and money it will take to get there.


  • High potential for getting the home in good shape and move-in ready
  • Crews are more experienced at getting results than the average DIY-er


  • This may kind of defeat or dilute the purpose of saving money on a home renovation loan
  • Wood and other materials are very costly in 2021
  • Renovation contractors may have unreliable timeframes
A man working on a ladder inside a torn-up home.

DIY Home Renovations

DIY renovations are sort of the great gamble of the home sale world. That’s because there’s a lot on the line here if you choose to take on a significant project. It should be said: you may save a lot of money. But alternatively, you may cause more problems than you solve. But let’s say you know what you’re doing. The next question is whether you’re comfortable with the opportunity costs.


  • Save big on labor
  • Can be a fun, bonding experience with your partner
  • Helps you feel invested in the process


  • Money (I know we mentioned this earlier, but have you seen the cost of wood lately?!?)
  • Opportunity costs (consider what you won’t be able to focus as much time on — your actual job, spending time with your kids, etc.)
  • Little mistakes can cause big damage
  • Folks often get hung up on one final obstacle (“We did it all, but there was just that one last thing…”) This really sucks. It’s all too common and can result in the dreaded unfinished DIY home renovation project.
A man and a woman in hard hats working outside on a home renovation project.
DIY home renovation can be a fun group project! But make SURE your partner is as excited as you are 😉

Sell to a Direct Buyer

Sometimes you can find a reputable renovation team looking to buy houses outright in your area. This option is best for folks with damaged homes who lack the interest, passion, and/or money to renovate it themselves.


  • Quickest turnaround (so you’re basically assured of a sale while the market’s still hot)
  • Cash in hand
  • Easy process
  • Guaranteed dollar amount (you get an upfront offer with no extra fees period)


  • Move-in ready homes sold on the market tend to make the seller more money (of course, you also have to factor in the opportunity cost + realtor fees, closing fees, and any other expenses to update and list.)
Plastic sheeting on the walls inside a home during a renovation project.


Let us know what options YOU are considering! Our office is always available for walk-ins and phone calls. You can also find us on Facebook, so reach out with questions or… with your craziest home renovation story!

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