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Home improvements and repairs are not only a great investment, but they may increase a home's value and make it livable for many years to come. If you are considering a home renovation or improvement, you need to know your financing options. Here are six home improvement loan alternatives you may want to consider to help pay for your next renovation project.

What type of loans are available for home improvements?

Conventional cash out refinance

If you have been living in your home for a while and have enough equity, then you can refinance your existing mortgage to a larger amount and receive the difference in cash to pay for a home improvement. You may be able to get up to 80% of the value of your home. Learn more about a cash out refinance and if it is the best type of loan to fund your home improvement.

VA cash out refinance

A VA cash out refinance is similar to a conventional cash out refinance in that veterans can tap into their home equity to get cash to pay for home improvements. The difference is that VA allows you to finance up to 100% of the equity of your home, unlike a conventional cash out where you can only take out 80%. However, you still need to pay the VA funding fee, which can be rolled into the full loan or paid in cash at closing. Learn more about choosing a VA cash out refinance loan for home improvements.

Home equity loan

A home equity loan uses your equity as collateral to get a second mortgage to pay for a home improvement. Like a conventional cash out refinance, you may be able to get cash up to 80% of the value of the home. Plus, any improvements you make can help increase your home's value and build more equity. Learn more about home equity loans as a type of home improvement loan.


A HELOC is similar to a home equity loan in that you borrower money from your home's equity. Instead of taking out a lump sum like other loans, a HELOC is a line of credit that allows you to take draws based on the amount you need. Learn more about HELOCs and if they are right for funding your next home improvement project.

FHA loans

FHA loans are insured by the U.S. Federal Housing Administration and are designed to help expand homeownership to people who can't afford to make a large down payment. These loans are popular with first-time homebuyers. The FHA offers home improvement loans, called Title 1 loans, that allows borrowers to finance repairs or home improvements.

Personal loans

These are separate unsecured personal loans. However, you may find that interest rates are higher than they would be if you went with a cash out refinance, home equity loan or HELOC. Check with your bank, credit union or other lenders to determine the best interest rate if you decide to go this route to fund your home improvement.

There are many types of home improvement loans and other ways to finance home renovations. Do your research, look at interest rates and make sure you can afford the monthly payments before choosing a home remodel loan option.

If you have questions or want to learn more about options, contact our home loan specialists to learn about the solutions we offer.

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