Home remodeling projects offer a chance to transform a house into a dream home while increasing its value. However, these projects often come with significant costs that can be challenging for homeowners to manage.
Contractors frequently encounter homeowners who are excited about their renovation plans but hesitant to proceed due to budget concerns. A quick and flexible financing option, like an online Home Equity Line of Credit (HELOC), can bridge these budget gaps and help homeowners move forward with confidence.
In fact, a survey by Lending Tree found that 38% of homeowners planning renovations use a HELOC or home equity loan to finance their projects.
This article explores how digital HELOCs can empower homeowners to achieve their renovation goals while addressing budget constraints and overcoming project setbacks.
The landscape of home renovation financing
Home renovation projects are often accompanied by excitement and apprehension. Homeowners may have grand visions for their spaces but can face significant challenges in funding their ideas. Renovation costs can quickly spiral, especially with unforeseen issues, leaving homeowners in a difficult position.
Filling the gap: The need for flexible financing in home remodeling
Homeowners often limit themselves in the type or amount of home improvement projects they take on due to these common financial barriers:
High upfront costs: Materials, labor, permits, and other renovation expenses can be overwhelming for homeowners.
Limited savings: Many homeowners don’t have enough cash in their savings to cover the full costs of a remodel, especially if there are unexpected repairs.
Economic concerns: Uncertainty about the economy, interest rates, or personal income can make homeowners hesitant to commit to the full scope of a project.
Difficulty securing a loan: Personal loans or other traditional sources of financing may come with lengthy approval processes or high interest rates.
Unplanned expenses: Renovation projects frequently uncover hidden issues that can increase costs and strain the homeowner’s budget.
These barriers could cause homeowners to unnecessarily scale back renovation plans or even cancel projects altogether.
How HELOCs can address these financial challenges
Home Equity Lines of Credit (HELOCs) provide a straightforward way to fund renovations by leveraging the equity a homeowner has built into their homes.
Access to fast, flexible funds using a revolving line of credit empowers homeowners to achieve their remodeling goals without sacrificing the scope or quality. Figure’s digital HELOC, for instance, is approved in as little as five minutes and can be funded in as few as five days².
Help homeowners overcome financial barriers with home equity.
What is contractor financing for home improvements?
Contractor financing is a solution contractors offer to help homeowners fund their home improvement projects.
When contractors provide financing options, they help homeowners bridge the gap between their renovation goals and financing abilities. It simplifies the remodeling process for homeowners and keeps projects moving.
A HELOC is one of the most popular contractor financing options due to its accessibility and ease of use. With no dealer fees, Figure's HELOC empowers contractors to help clients fund larger projects without taking on added financial stress themselves.
HELOC benefits include:
Flexible access to funds through a revolving line of credit, which allows homeowners to borrow what they need when they need it.
Competitive rates that are often lower than credit cards or personal loans, helping homeowners save.4navigates to numbered disclaimer
The loan is specifically tied to the property, which aligns with home improvement projects that can increase the home’s value and function.
Contractor financing options help make home improvements, renovations, and remodels more accessible to more homeowners.
Contractors’ role in supporting homeowners with financing
Although contractors cannot directly discuss or offer financing options, they can support homeowners in the following ways:
Introduce it early in the conversation
To operate with full transparency, introduce your home improvement financing options early in the conversation as you discuss your client’s budget and expectations. Educate homeowners about financing resources with available resources, such as HELOCs. This could include citing data like how “home improvement” ranks among the top two uses for HELOC borrowers, according to Figure’s 2024 Summer Report.
How to handle customer concerns around budget and financing
Customer objections are a natural part of the sales process.
The key to overcoming objections is preparation. Let ’s look at some common customer objections surrounding budgets and financing, and strategies for addressing them.
1. Concerns about interest rates
Objection: “I’m worried the interest rates will be too high, making the project more expensive in the long run.”
Response: Explain how HELOC rates are often lower than credit cards or unsecured loans because they are secured by home equity. Share the rates offered by HELOCs compared to these alternatives.
2. Fear of taking on more debt
Objection: “I don’t feel comfortable taking on more debt right now.”
Response: Explain the flexibility of a HELOC, including the repayment terms. Help the homeowner understand that renovations are an investment in the home, and can significantly increase the value of their property.
Consider what contractor financing can do for your customers
Homeowners benefit from having access to financing solutions like HELOCs to achieve their dream renovations. By providing general guidance and pointing them toward trusted resources, contractors can help clients feel confident and informed throughout the process.
Figure’s digital HELOC platform is a leading solution for homeowners seeking fast and flexible financing options. With competitive rates, no dealer fees, flexible terms, and a quick online application process, Figure empowers homeowners to bridge budget gaps and bring their visions to life.
