How to Make Financing Home Improvements More Manageable
With the right plan, you can break down big home improvement projects
As the COVID-19 pandemic shut down the world, our homes became the center of our lives. And for many people, that meant becoming homeowners. According to the National Association of Realtors, home ownership grew at the highest rate ever in 2020: surging 1.3% to 65.5% ownership, with about 2.6 million people becoming homeowners.
But with home ownership comes the added expenses of maintenance and improvements.
The True Cost of Homeownership
When buying a house, budget for more than the sticker price. Along with the down payment and mortgage, you need to account forhomeowners insurance, home repairs, property taxes, HOA fees, renovations, utilities, and more, all while still having money tucked away for emergencies.According to our research, the average household completes between 8 and 9 maintenance and at least 2 emergency repair projects per year. What’s more, home improvement and maintenance spending increased by 20% in 2021 for an average of $15,680 per household, including more than $2,200 in emergency project costs.
“The old rule of thumb that you should budget about 1% of your home value actually holds up pretty well,” says Mischa Fisher, Chief Economist of Angi. “What we observe in our research is that most people spend between 0.5% and 1% of their home’s current value on maintenance and minor repairs each year. The average is on the lower end of that, but it’s not a bad idea to budget more knowing that you might not be able to save as much as you hope.”
How to Pay for Big Budget Projects
If you’re tackling a large-scale, costly project, you don’t need to fork over the funds all at once. There are a few ways you can finance home remodels or other big-budget projects:
Home equity loans: This method works by borrowing against the value of your home, minus what you owe on your mortgage. The loan is delivered in a lump sum payment upfront.
Home equity line of credit (HELOC): Like home equity loans, this is an option if you already have equity in your home. However, unlike the former’s lump sum payment, a HELOC can be drawn slowly over time.
Cash-out refinances: This is an option if you’re looking for a large sum of money you can pay back over time. However, this could cost you more in the long run.
Pay-over-time service: Some services like Affirm let you secure a project now with Angi and pay it off in installments over time. Depending on your plan, installments may be interest-free.
Is ‘Pay Over Time’ Financing Right for You?
Which method is right for you depends on the project’s total cost as well as your own financial situation. Paying over time can make paying for big projects, likebuilding a room addition orremodeling a bathroom, a lot less daunting—instead of paying thousands at once, you can break the cost down into smaller, more manageable payments over a set amount of time.
How to Pay Over Time With Affirm
Affirm makes it easy to buy those much-needed windows or hire a pro to give your home a new paint job without stressing your bank account. They tell you upfront what you would pay, and upon approval, lets you pick a clear payment plan—without any hidden or late fees.
For big projects, like a remodel, pros will have you pay in large installments, such as 50% up front and 50% at the end of a project. With Affirm, your pro will receive the full payment amount immediately while you can pay smaller amounts over the course of your project so you don’t derail your monthly budget. See some examples for how using Affirm could impact your payment:
| Project | Average Cost | Monthly Payment with Affirm (at 15% APR)* |
|---|---|---|
| Fence installation | $3,000 | As low as $145.46/mo over 24 months |
| Roof installation | $6,000 | As low as $207.99/mo over 36 months |
| Landscaping | $4,000 | As low as $193.95/mo over 24 months |
| Painting | $2,000 | As low as $96.97/mo over 24 months |
Paying over time with Affirm for your home renovations stretches your money further, helps you fit projects into your budget, and can help you make sure your project is completed just how you want it. With Affirm, you pay over time either monthly or every other week :
Affirm Pay in 4: You pay in four interest-free installments every two weeks.
Monthly plans: For bigger purchases (like a new room addition, perhaps?), you make monthly payments up to 36 months.
When you’re financing through Affirm, the costs are all disclosed up front. Just enter the total cost of the project, get approved, select a payment plan, and Affirm clearly tells you how much you’ll pay, how often, and when you’ll have it paid off.
How to Access Affirm For Your Angi Projects
If your one-time project costs between $150 and $17,500, you are eligible for pay over time financing. Here’s how you can finance your home projects with Angi:
Book your project through Angi: From routine maintenance to dream house improvements, we’re here to help. When you book through Angi, you’ll have the option to either choose Angi Services, where we supply the pro, or select the specific pro(s) you want to work with directly.
Choose Affirm during checkout: When you checkout and pay through the Angi app, you will see the option to pay over time with Affirm. If you choose an Angi Service for your project, you’ll simply select Affirm when you pay at the time of booking. If you choose to work directly with an Angi pro, pay them directly in the Angi mobile app, and select the option to finance your payment through Affirm.
Get a real-time decision: Enter a few pieces of information in the Affirm application—it’s fast and easy to apply, and applying never affects your credit score.
Pick your payment plan: Select a flexible payment term—4 interest-free payments every 2 weeks, or monthly payments over a longer period.
After you’ve checked out and chosen a payment plan, your pro will receive the full payment immediately, and you can continue to make payments over time with Affirm.
*For example, a $3,000 service might cost $145.46/month over 24 months at 15% APR. Your rate will be 0% APR or 10-30% APR.Payment options through Affirm are subject to an eligibility check, and are provided by these lending partners:affirm.com/lenders. Options depend on your purchase amount, and a down payment may be required. Affirm and its lending partners do business in accordance with federal Fair Lending laws. CA residents: Loans by Affirm Loan Services, LLC are made or arranged pursuant to a California Finance Lenders Law license.