5 ways to pay for home office renovations

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Need a home office? Here are some ways to pay for workspace. (iStock)

Over the past year, the coronavirus pandemic has changed the way many people work. Millions of students have taken online courses and millions of adults have started working from home. A Pew study showed that in December, about 71% of Americans were working from home, while only 20% of working adults did so before the pandemic began.

This significant increase in home office tasks created a problem for people who previously didn’t have to worry about funding a home office renovation. While working on the couch or at the kitchen table is an option, doing this in the long run is neither productive nor comfortable, especially if you have roommates, pets, or children.

HOW HOME RENOVATIONS IMPACT YOUR HOMEOWNER INSURANCE PREMIUMS

Tips for financing a home office

Financing a home office can be tricky, but here are some ways to get the space you need without breaking the bank.

  1. Use your savings
  2. Personal loan or renovation loan
  3. Home equity line of credit (HELOC)
  4. Use a 0% credit card
  5. Consider a small business loan

1. Use your savings: If you have some cash on hand, accessing your savings account to fund your home office might be the cheapest option. But you’ll want to budget to avoid overspending and draining the money you might need later. You can avoid overspending by going to thrift stores or local used furniture vendors and reusing items you already own.

If you run out of funds, you won’t be able to build a new space, but you could reuse a closet or corner on a budget.

2. Personal loan or renovation loan: To pay for your new home office space, you might consider a personal loan or a home improvement loan. You can get personal loans for varying amounts like $ 500 or $ 5,000. A personal loan also offers a range of options, from financing equipment purchases to small expansions.

But remember that expenses paid with a personal loan are not tax deductible, even if you are using the money for home improvements. Home improvements are tax deductible with loans that use your home as collateral.

If you want to get the best rates, you will need a good credit score. You can explore your personal loan options by visiting Credible to compare rates and lenders.

DO YOU NEED A PERSONAL LOAN FOR A HOME IMPROVEMENT PROJECT?

3. Home equity line of credit (HELOC): If you have equity in your home, you may be able to access it with a home equity line of credit. A HELOC works like a credit card but uses your home as collateral. When considering a HELOC, keep in mind that you should only borrow what you know you can repay. If you use the money to make improvements to your home, these expenses could be tax deductible if the improvements increase the value of your home.

As of April 23, the average 15-year fixed-rate mortgage refinance rate was 2.250%.

Like many personal loans, HELOCs are primarily used for home renovations, upgrades, or to cover an emergency expense. If you want to learn more about how you can leverage your home equity, visit Credible to see your options.

3 MORTGAGE REFINANCING OPTIONS FOR THOSE WITH BAD CREDIT

4. Use a 0% credit card: You may be eligible for 0% interest on certain credit cards. Besides using savings, this might provide the cheapest option to create office space if you pay off the card before the promotional rate ends. When applying for this type of card, read the fine print, as some cards charge you interest on any amount you haven’t paid at the end of the promotional interest rate. Don’t forget to read the terms of use of a universal default clause. This clause could void your promotional rate if you make a late payment.

To learn more about 0% APR credit cards – which allow you to avoid paying interest charges for up to 18 months in some cases – check out Credible’s partners and what they have to offer.

GET A 0% APR CREDIT CARD TO SAVE MONEY – THIS IS HOW IT WORKS

5. Consider a small business loan: If you run a home business or own a small home business, you may be eligible for a loan with lower interest rates. You may also be eligible for an emergency grant from the Small Business Administration. Visit the SBA website for more details on how to apply.

Remember, you can also visit Credible to connect with experienced loan officers and get your loan questions answered.

Final thoughts

Working from home has its benefits, but creating a workspace that allows you to be productive can help bring some normalcy to your day. There are options for every type of budget. Take a look around and come up with a plan that will help you stay focused and stay on budget.

5 BENEFITS OF HAVING A GOOD CREDIT SCORE

Have a financial question, but don’t know who to ask? Email the Credible Money Expert at [email protected] and your question could be answered by Credible in our Money Expert column.



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