100floors.com: How to fund for your renovation

Online, October 9, 2009 (Newswire.com) - Cash and Liquid Assets for renovation The most readily available money you can have: savings, checking, CD's and savings bonds near maturity. Pros * No interest, no fees, no charges. * You are not dependent on anyone else. Cons * Depletes any reserves you may have. * Most people don't have a lot of cash available. Bottom Line: Cash and liquid assets are the best way to fund your projects--but only if you've got plenty to spare.

Credit Card for renovation A credit card that you pay off at the end of each month. Or a zero-interest that you don't have to pay off for six months or a year. Some homeowners pay off one zero-interest card with yet another zero-interest card, thereby creating a permanent, but risky, no-interest loan. Pros * Money available quickly. * Lucrative points or rewards possible on some cards by charging large home-related purchases. Cons * Danger of high interest and fees. * Give you false sense of security that you have more money than you actually have. Bottom Line: A tricky way to finance home renovations, and one that requires attention and maintenance.

Home Equity Loan for renovation A home equity loan is the classic way to finance home renovations. Take out a loan against the equity in your own house. Pros * Large amounts of money may be available for large projects like additions. * Lower interest rates than personal loans and credit cards. Cons * If you keep depleting your equity, you reduce the sum you will receive when you eventually sell the house. * The large amounts available with this loan encourage spending on things unrelated to the renovation. Bottom Line: Target this loan only for specific projects.

Sweat Equity for renovation Got any willing friends and family? For the price of a six-pack and a takeout pizza, they may help you put some sweat equity into your renovation project. Pros * Labor is completely free. * Satisfying to have 100% control of your project. Cons * Only the labor is free; you still have to pay for materials. * If a learning curve is involved, still may be cheaper and faster to hire workers. Bottom Line: Some sweat equity is inevitable, and even can be fun, but don't stretch it if you're not sure of your abilities.