Basement Renovation Costs: Financing vs. Cash Options

basement renovation , financing

Have you been considering a basement renovation but aren’t sure how you will finance it? 

The experts at HFS Financial know that a basement renovation can be an excellent way to add value and usable space to your home. However, the cost of such a project can often be a significant factor in the decision-making process. 

When financing a basement renovation, homeowners typically have two primary options: financing or paying in cash. They have pros and cons, but ultimately financing the project with a personal loan will allow you to accomplish more at a faster pace.

Financing Options for Basement Renovation

Home Equity Loan

One popular financing option for basement renovations is a home equity loan. This type of loan allows homeowners to borrow money against the equity they have built in their home. 

With a home equity loan, you can typically secure a lower interest rate than with credit cards, but you need to remember that failure to repay the loan could result in complications with your home.

Home Equity Line of Credit (HELOC)

A HELOC is another standard financing option for basement renovations. Like a home equity loan, a HELOC allows you to borrow against the equity in your home. 

However, unlike a loan, a HELOC functions like a credit card, where you can borrow and repay as needed during a predetermined draw period. 

The interest rates for a HELOC can be variable, so it’s crucial to consider potential rate fluctuations when budgeting for your renovation project.

Personal Loan

If you don’t want to use your home as collateral, a personal loan is an excellent financing option. 

Personal loans don’t require collateral. They are also often quicker to obtain and can provide a lump sum for your renovation project.

Using a personal loan through HFS Financial allows you to have the money you need on hand to complete the basement renovation of your dreams without the insane interest rates of a credit card or placing your home in jeopardy.

Cash Options for Basement Renovation


Paying in cash from your savings account is the most straightforward option for financing your basement renovation. 

By using your funds, you avoid incurring any debt or interest payments. However, you need to have a substantial amount saved. 

You will also need to evaluate your savings and ensure you maintain your emergency fund to protect yourself financially before wiping out your savings account.

If you have money placed in a high-interest savings account option, you also need to weigh how much money you will make when leaving that money in place versus paying on a loan.

Home Refinancing

Another way to fund your basement renovation is through home refinancing. This involves replacing your existing mortgage with a new one, typically with a higher loan amount. 

While this option can provide a lump sum of cash, it’s essential to consider the closing costs associated with refinancing and the potential impact on your overall mortgage terms. 

You will still make a higher mortgage payment for yourself and potentially place your home at risk should you not be able to pay.

Whether you finance your basement renovation or pay in cash, carefully considering your financial situation and long-term goals is crucial. We want to help you protect your home without paying crazy interest rates associated with credit cards. 

Our experts are ready to help you get the ideal personal loan for your basement renovation now. You can fill out our rate checker in as little as one minute to see if you are conditionally approved. 

Don’t wait any longer to start your project. Reach out today. With HFS Financial, “You Dream It. We Finance It.” 

Basement Renovation Costs: Financing vs. Cash Options

HFS Financial solely operates in the home improvement lending space which means we can confidently say that we are THE HOME IMPROVEMENT LOAN EXPERTS. When you apply at HFS Financial you will get a customized loan experience tailored to ensuring you get the best personal loan to meet your home improvement loan needs.