Home Improvement Loan Calculator

If you are looking to complete renovations on your existing home or you are looking to purchase a home that needs renovations, you may be in need of a loan. Depending on the size and scope of your renovation aspirations, and whether or not you need to pay for the purchase of a new home on top of the renovations, you have two distinct paths to consider.
The first path involves a home loan and/or home equity. These types of renovation loans are tied to your home’s value and most often they require that you use your home as collateral to secure the loan. The second path you may want to consider involves financing options that are not tied to your home. If you are planning on purchasing a home that is in need of repairs, then you may want to automatically choose a loan option that includes the costs of the renovations into the mortgage. The main reason for this is that renovation loan options that involve a mortgage or that use your home as collateral, most often come with much lower interest rates than other methods of financing. However, if you absolutely want to keep the costs of renovating your home separate from your home loan, or you do not want to use your home as collateral to secure the extra funds needed for renovations, then you can choose the second path of financing options that are not tied to your home.
Whether you choose the first or second path of financing options, the amount of money you can borrow is going to depend on the method of financing and the lender. Let us take a look at a few different financing options from each of these two paths and explore how much you may be able to borrow to complete your home renovation projects.Home loan financing options

Home equity loan and home equity lines of credit: If you have at least 20% equity built up into your home, you could consider a home equity loan or a home equity line of credit to finance your renovation projects. When you use your home’s equity to obtain financing, you may be able to qualify for larger amounts at lower interest rates than other types of financing. The amount of money that you can borrow from either a home equity loan or a HELOC depends on the lender and the amount of equity you have in your home. Depending on the lender, you may be able to borrow up to 80%, 85%, or even 90% of the equity you have in your home.
Equity is essentially the difference between the fair market value of your home and the current balance of your mortgage. For example, if your home is currently worth $600,000 and you still owe $350,000 on your home mortgage, then your home equity would be valued at $250,000. Depending on the lender, you then may be able to borrow up to 80% to 90% of that $250,000 giving you a potential renovation budget between $200,000 and $225,000. Again, you do not need to borrow the entire amount and you most likely should not deplete all of the equity in your home in a second mortgage or home equity line of credit.
To determine how much you could borrow using the equity in your home, you should first calculate how much equity you have and then begin to research lenders to see how much of your equity they may allow you to borrow. One last thing to consider is that for both equity financing options, you will be taking on a second monthly payment in addition to your primary mortgage payment. If for some reason you are unable to make either one of these payments, you could be in danger of losing your home.
Cash-out refinance: A cash-out refinance works similarly to a home equity loan, however, instead of getting a second mortgage with an additional monthly payment, you are simply replacing one mortgage with another. If you were already planning to refinance your home to take advantage of lower interest rates, then a cash-out refinance can give you the option to add the costs of your renovation projects into your new mortgage. For a cash-out refinance, most lenders allow you to borrow up to 80% of your home’s value minus your current mortgage balance. For example, let us say your home is worth $400,000, the maximum loan amount you would be able to obtain would be $320,000. The $320,000 new mortgage will pay off your current mortgage, and any funds that are leftover can go to you to pay for your renovation projects. If your current mortgage balance is $250,000, that means that $320,000 – $250,000 gives you a maximum cash-out amount of $70,000.
FHA 203k rehabilitation loan: If you are looking to purchase an older fixer-upper home and finance the home purchase along with up to $35,000 of home repairs, then you could always explore obtaining an FHA 203k rehabilitation loan. If you are looking to refinance your current mortgage on your existing home and you have at least $5,000 worth of renovations to be complete, then you can obtain an FHA 203k loan to refinance your home and to pay for the renovations you would like to complete. In order to determine how much you can get from an FHA 203k to refinance your home and to pay for your renovations, a lender will need to order an appraisal. The appraiser will determine the current value of your home and how much your home may be worth after the renovations are complete. The value of the FHA 203k loan will then be determined by the results from this appraisal.
FHA Title 1 loan: If you are looking for money to renovate your home, you may want to see if you can qualify for an FHA Title 1 loan. FHA 1 title loans have some strict requirements, however, if you can meet all of the requirements you may be able to access up to $25,000 for your single-family home renovation projects. If you obtain an FHA Title 1 loan that is less than $7,500, then you do not need to use your home as collateral. Any loan amount above $7,500 and up to $25,000 requires using the home as collateral. Other requirements to obtain an FHA Title 1 loan include that you need to be the homeowner or possess a long-term lease on the home, you must have been living in the home for at least 90-days, the loan must be used for specific property improvements that are approved by the FHA, you must pay a mortgage insurance premium of $1 per $100 of the amount of the loan, and you must have a debt-to-income ratio below 45%. For an FHA Title 1 loan, there are no minimum credit score or income requirements.
Fannie Mae Homestyle loan: Another option for using a home loan to pay for your home renovations is by purchasing a new home or by refinancing a current home with a Fannie Mae HomeStyle loan. The Homestyle loan allows you to borrow up to 95% of a property’s after renovation value. FannieMae caps these loans at $548,250 for normal housing markets and $822,375 in high-cost urban housing markets.
VA renovation loan: The maximum renovation is determined by the lender, however, most lenders cap VA renovation loans to provide no more than $50,000 to be devoted to home repairs and improvements.

Non-home loan financing options:

Cash: If you have the ability to save money or dip into your savings, paying cash for home improvements can be a cost effective option. If you can call upon your savings to pay for home improvements, repairs, renovations, and/or regular maintenance, you may end up saving hundreds or thousands of dollars in interest payments and other fees that other types of financing can bring. If you have some renovation ideas in mind but you can wait a bit before starting them, you may want to try to put every extra dollar you can into savings to help fund your renovation projects.
Personal home renovation loan: Personal home renovation loans can be a smart way to finance your home renovations without needing to use your home or any other asset as collateral to secure the loan. For those who can qualify, some lenders offer personal renovation loans of up to $100,000 with repayment periods that extend for up to 12-years.
Credit cards: Depending on how large your renovation project is and the amount that you expect to spend, you could fund the entire project by paying with credit cards. You can use a credit card to pay your contractor, purchase tools and materials, and pay for fees like building permits. Your budget then may be only limited by your credit limits on your credit cards, however, if you make payments on your card balances as the project progresses, you can free up more credit to pay for more of the project. A credit card can offer a pay-as-you-go approach to your renovation project.
A personal line of credit: A personal line of credit would act the same way as a credit card, however, personal lines of credit may come with lower interest rates and you can have access to cash if you need to pay for particular portions of your renovation project in cash payments. Again, your budget is only restricted by your credit limit, however, as you continue to make large payments on your credit line as your project progresses, you can free up more room to pay for more expenses.

Yes, there are several home loan options available that allow you to roll the costs of a renovation into the primary or second mortgage. Those types of home loans include the following financing options.

Home equity loans
Home equity lines of credit
Cash-out refinances
FHA 401k rehabilitation loans
FHA Title 1 loans
Fannie Mae Homestyle loans
VA renovation loans
USDA loans

All of these options involve a home loan in some way whether it is a second mortgage, home refinancing, or a new home loan used to purchase a home in need of renovations. The one that is perfect for you depends on your homeowner status, income, credit score, and the scope and size of your renovation projects.

Monthly payments on any type of loan are determined by the loan amount, the length of the loan repayment period, and the interest rate. If you are trying to get the most accurate details about what kind of monthly payments you may have to pay for a $20,000 personal loan, then you may want to prequalify. When you prequalify for a $20,000 personal loan, the process typically involves a soft-pull credit check which can help determine what kinds of APRs you may qualify for based on your credit history. A better credit score means that you may qualify for lower interest rates on a personal loan. If you have a bad credit score, then you most likely will have to pay higher interest rates and fees. Additionally, people with bad credit scores may not even be able to qualify on their own. Instead, a bad credit borrower looking for a $20,000 personal loan may have to use a co-signer, or co-borrowers, or apply for a secured personal loan that requires them to use their home, vehicle, or other assets of considerable value as collateral.
Whatever your credit situation happens to be, to prequalify for a $20,000 personal loan, all you need is some basic information and a few minutes of your time. By entering in some details about your identity, address, and income, you may have an answer within a few minutes about whether or not you can qualify for a $20,000 personal loan. If you do prequalify for a $20,000 loan, you can then begin to review loan offers from various online lenders who may have different interest rates, loan terms, monthly payments, fees, and other terms and conditions that you will want to educate yourself on before accepting a loan offer. At Acorn Finance you can check personal loan offers from top national lenders without impacting your credit score.
A personal loan payment calculator can also help you estimate what your monthly payments might be. Without prequalifying you will simply be assuming what you might qualify for. This is why we recommend getting prequalified so that your payment estimates are as accurate as possible. Before you use an online personal loan calculator to help estimate monthly payments on a $20,000 personal loan, you should have an idea of what credit score category you are in. If you are not aware of what your current credit score is, then you may need to request copies of your credit reports from a free online credit monitoring service. Also, you may be able to see your credit report for free from your credit card company if they offer that service for being a customer. Knowing your credit score can help you estimate what you might qualify for. For example, if you have a 750 credit score and a lender offers $20,000 personal loans with rates starting at 4.99%, you could assume that you will qualify for the 4.99% or a rate very close to it. Using the payment calculator you can enter the loan amount, interest rate, and term to estimate monthly payments and total loan cost.
Remember, the shorter the loan term is the higher your monthly payments may be but the less interest you may have to pay. The longer the loan term is, the lower your monthly payments may be but then you may have to pay more interest. Let’s plug in some numbers to review a few examples.

If you have good credit, which is sometimes considered a credit score between 690 and 719, and you are looking for a $20,000 personal loan with a 24-month repayment period, then your monthly payment is estimated to be about $974.49/per month. This is for a 24-month $20,000 personal loan with an estimated APR of 15.5%. Over the duration of the 24-months, you may expect to pay a total of $3,3987.76 in total interest. The same exact loan over 36-months could bring down monthly payments to a more manageable $698.21/per month, however, you then most likely will pay closer to $5,135.56 in total interest.

Considering everything we just discussed about finding the estimated monthly payments for a $20,000 personal loan, let us run some numbers in the online personal loan calculator to see how much the monthly payments may be on a $30,000 personal loan.
If you have fair credit, which is sometimes considered a credit score between 630 and 689, and you are looking for a $30,000 personal loan with a 24-month repayment period, then your monthly payment is estimated to be about $1,534.21/per month. This is for a 24-month $30,000 personal loan with an estimated APR of 20.5%. Over the duration of the 24-months, you may expect to pay a total of $6,821.04 in total interest. The same exact loan over 36-months could bring down monthly payments to about $1,122.57/per month, however, then you most likely will need to pay close to $10,412.52 in total interest.

There are many ways to fund a home renovation. You can either pursue home loan style financing options or non-home loan style financing options. For home loan styles you have home equity loans, home equity lines of credit, cash-out refinances, FHA 203k rehab loans, FHA Title 1 loans, Fannie Mae HomeStyle loans, VA renovation loans, and USDA loans. For non-home style loans, you can pay cash, use credit cards, open a personal line of credit, or take out a personal home renovation loan.

Yes, there are many mortgage types that you may be able to include the costs of home renovation projects. For example, a cash-out refinance is a mortgage refinance that allows you to use your home’s equity to obtain a new larger mortgage to pay off your old mortgage and to have money left over to pay for any home renovation projects you would like. In addition to cash-out refinances, you could always explore purchasing a new home or refinancing an existing home with an FHA loan, a Fannie Mae HomeStyle loan, or a VA loan. A home equity loan is also technically a mortgage-style renovation loan, however, it is a second mortgage in addition to the primary mortgage.

Personal loans: Personal loans can be a smart financing option for home renovation projects. You can use a personal loan to complete any type of renovations that you would like without the need for inspections from banks, lenders, and/or government agencies like HUD or the VA. Personal home renovation loans can be for amounts of up to $100,000 with loan repayment periods up to 12-years for those who qualify.
Home equity: Home equity loans are an outstanding way to get larger sums of money at lower interest rates than other financing options. If you have a minimum of 20% equity in your home, then you can tap into that home equity to fund your next home renovation project.
Personal credit lines: Personal lines of credit work like a credit card, but instead of charging a card, you can take out microloans by making withdrawals against your credit limit. When you make a withdrawal request, the funds can be instantly transferred into your personal checking account where you can write checks, use a debit cards, or take out cash to pay a contractor, plumber, electrician, interior designer, HVAC specialist, or any other professional you may need to help you with your home renovation. You can also use the funds from a personal line of credit to pay for materials and labor costs.
Government loans: There are many loans available through different federal agencies that homeowners or prospective homeowners can take advantage of to not only finance their renovation projects but also to finance their home purchases.

Yes, as long as you have a minimum of 20% earned equity in your home, you may be able to borrow up to 80% to 90% of that earned equity. To calculate your home’s equity, simply subtract your current mortgage balance from your home’s current fair market value.

There are many benefits to being able to DIY your home improvement projects. You can save a lot of money in labor costs as well as avoid having to pay a general contractor. Both of which can be quite expensive. Additionally, if you decide to do most of the home improvements on your own, you can also pay cash as you go by breaking the projects up into smaller projects and by purchasing only the materials you need when you need them. However, if there is any aspect of the project that you are unsure of, it may be worth spending the extra money to hire a professional. The main reason for this is if you should happen to make any mistakes, you could create an unsafe environment and spend more money to have a professional come in to remove what you had done and redo everything.

If you are trying to figure out how much money you can borrow for your home improvement project, you may need to first decide what kind of loan method is best for you. Once you know what kind of financing you would like, then you can start to figure out how much you can borrow.
For example, if you are looking for a personal home improvement loan, then you can always prequalify to determine how much you can borrow. If you are looking for a home equity loan, you can calculate your home’s equity by subtracting your mortgage balance from your home’s value. This calculation should help you estimate how much you can borrow. Again, to figure out how much money you can borrow, you need to first determine which financing option is best for you because loan amounts can vary depending on the lender and the loan type.