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Financial tips when renovating your home

July 08, 2010

You take pride in the upkeep of your home. But upgrading your kitchen, renovating your bathroom, or landscaping your garden shouldn’t have to cost you an arm and a leg. Rather, you can create the kind of home you have always dreamed of in a cost-efficient fashion. Here’s how.

The first step to doing home renovations the right way is establishing a budget. First, determine what you can afford to spend on your home. Next, shop around for quotes from different retailers, contractors, and trades people in search of the best price. If your project costs fall outside your budget, decide which modifications are essential to your home renovation – and which can fall by the wayside, at least for now.

Now that you’ve nailed down your renovation project particulars, and have set a budget, you’re free to choose from a variety of cost-efficient payment options.

Reno tip. Upgrades to your kitchen and bathroom typically offer the highest payback value when you decide to sell your home.

Paying with plastic

If you are making modest renovations on your own, paying for the materials with your credit card may make the most sense – provided that you pay your balance monthly. However, for more extensive work, avoid making advance cash withdrawals on your cards, otherwise you risk accruing high-interest debt.

Reach for a line of credit

A personal line of credit, like ScotiaLine or ScotiaLine Gold[1], is an excellent way to get the cash you need. Enjoy immediate access to money whenever and wherever you need it or want it. Pay interest only on the amount borrowed – a real perk when paying a contractor in instalments over the course of a lengthy home renovation. What’s more, choose between making minimum monthly payments or paying off your entire balance without penalty. Nowadays you can pay your line of credit online or access funds through an ATM, making ScotiaLine simple, convenient and flexible.

The value of equity

For major renovations, you may want to tap into the existing value of your home. After all, the equity you have built in your home can serve as a valuable source of financing. By borrowing against it to pay for a large-scale home renovation, you can retain greater control over your monthly payment amount.

Your home is your pride and joy. Making sure it looks its best shouldn’t be a source of financial frustration. Rather, by setting a realistic budget, and carefully considering cost-effective financing options, you can make your home renovations a reality.

 [1] Available in select countries