Funding a Home Remodel During Retirement

white and gray themed kitchen counters

Most aging adults want to stay in their homes as they grow older. They don’t want to go live in a retirement facility or have to move in with their children. In all, about 88% of adults between 50 and 80 express a desire to continue living in their homes. 

Beyond wanting to avoid living in a retirement facility or with family, the sentiment is understandable. Many older people have lived in their current homes for many years. They worked hard to earn their home and have memories of raising a family there. More than personal independence, your home has emotional value.

As much as there might be a desire to stay in your home, it isn’t always that simple. As an older home, it might not be ideal for a retired person. It might need various renovations to make the home suitable and safe. For example, you might remodel the bathroom to change the tub to a walk-in shower. You might also choose to widen doorways. Some older people might just want a change of décor.

Before you can start these essential remodels for aging in place, you will need funding. Some of these projects can be expensive. This post will cover a few options older people have for funding remodel projects during retirement.

Pay From Your Savings

If you have cash available in your bank account, paying with your savings might be the best option. It is quick and easy. You won’t have to go through the hassle of applying for loans, and you won’t have to pay interest or fees. Paying in cash could be the cheapest and easiest way to fund home improvements.

That said, there are things to consider. Even if you have the cash available, you might not want to drain your bank account or emergency fund. It is good to keep cash available when you need it. You could also consider delaying the project while you save money. If the project is not that large, you might be able to save over a few months so you won’t need to borrow or take too much from your existing savings.

Personal Loan

A personal loan from a bank might be a good option for funding renovations. There are several benefits of taking a personal loan. To start, you won’t need to put up collateral to secure the loan. They also have lower interest and fees than some other borrowing options. The loans are also flexible. You can use them to pay for almost anything.

While a personal loan can be a good option for funding these projects, it might not be the best choice for everyone. You will need good credit, and the bank will want to see sufficient income to pay the loan back. Along with that, there might be cheaper options for borrowing if you own your home.

Home Equity Loans

If you have enough equity built up in the home, a home equity loan can be a great option. With this type of loan, you are borrowing against the portion of the mortgage you have paid. With the home equity acting as collateral for the loan, the costs of borrowing are usually cheaper than with personal loans.

A home equity line of credit could also be a good option for funding the project. It is like a home equity loan, but instead of a lump sum, the lender issues a line of credit. You can borrow against the line of credit as needed and pay it back.  

Reverse Mortgages

This can be a good option for many retired people. As long as you are over 62 and have at least 50% equity, you should be able to get a reverse mortgage. This is another way of borrowing against the equity in your home. However, the loan does not have to be paid until the borrower no longer lives in the home. 

You will find there are several options for reverse mortgages. They have different payment options, like lump sums or monthly payments. You also have many different lenders offering this type of loan. You can visit to learn more and compare products. Doing a little research will help you find the best deal.

Credit Cards

Credit cards might be a good option for some older people. It is a fast and convenient way to borrow. However, the fees and interest will likely be higher than with options like personal loans and home equity loans. It could make sense for some smaller projects. 

If you think you can have the balance paid quickly, the fees and interest might not be so bad. You could also consider opening a new card for the project. If you can find a card with 0% interest and no fees for the first year, it could offer a cheaper way to fund the project. You just need to make sure you have it paid before that year ends and be aware of the terms beyond the introductory period. 

Home Improvement Loans

Some lenders offer loans designed to help homeowners pay for home improvements. The terms of the loan can vary depending on the lender. For example, some might be modified versions of home equity loans. Others might be more like personal loans. You need to take your time and compare your options.

Some older homeowners might be eligible for section 504 home repair loans or grants from the USDA. The section 504 program aims to help low-income and older people pay for essential home improvement projects. As long as you qualify and the project meets the guidelines, it can be one of the most affordable options. 

Contractor Loans

You may also be able to get a loan through your contractor. Some larger contractors have the ability to fund the projects and then arrange a payment schedule with interest. Others might work with lenders to help clients secure funding. Either way, it can be one of the simplest ways to fund a home improvement project.

With that said, you need to treat it like any other borrowing option. It might seem simpler to get funding from the contractor, but you need to check the terms of the loan. While most contractors are reputable, some might try to get clients into unfavorable loans to gain additional profit. There is also just the simple fact that it might not be the best option for your needs.

The key to selecting the right funding option is to take your time. Consider your needs and review all your options. With a little time and effort, you should be able to find the most affordable borrowing option with terms that will work for you.