How to Finance Your Cincinnati Home Remodel

You’ve outgrown your home, but not your neighborhood. Sound familiar? We hear you. Deciding whether to buy a new home or remodel your current one is a common thought.

Many Cincinnati area families are sitting on low-interest mortgages they locked in years ago. Moving now would mean giving up a good rate, paying today’s high home prices, and starting over in a market that feels anything but buyer friendly. That’s why more homeowners in places like Montgomery, White Oak, and Madeira are staying put and reimagining their homes instead.

Here’s the good news: You don’t need to move, and you don’t need to fund your entire renovation in cash to create a home you’ll love for years to come.

Legacy Builders Group has helped hundreds of Cincinnati families navigate this very situation. In this blog, we’re breaking down six of the most practical ways to finance your remodel, from traditional cash payments to creative financing tools you might not have considered. Explore how a renovation loan could accelerate your project timetable.

Clarify Your Remodeling Vision & Budget First

Before you start shopping interest rates or calling banks, your first step is getting clear on the scope and cost of your remodel.

That’s where our team comes in.

As a design-build remodeling firm, Legacy Builders Group offers a streamlined process we call The Legacy Way. It’s how we guide you from big ideas to practical plans, and from plans to construction. Early in the process, we’ll work with you to define your goals, explore possibilities, and provide a realistic budget range for your specific project in your existing home. 

Once you understand what your project will truly cost, you can explore financing options that match your goals and timeline. That might mean defining a monthly payment you're comfortable with, tapping into equity, or mapping out a phased remodel approach. Whatever the case, you’ll be making decisions from a place of invaluable clarity.

Pay with Savings or Cash

It may surprise you, but the majority of our clients choose to fund their remodels in cash.

Why? For starters, paying cash eliminates interest, keeps your total project cost down, and simplifies everything. There’s no loan paperwork, no waiting on approvals, and no monthly payments to manage. For families who’ve been planning their remodel for years or recently sold a second property, using savings can be a smart, streamlined way to go.

Still, it's not the right choice for everyone.

Pros of Paying Cash to Remodel 

• No interest of lending fees
• Greater flexibility and faster start times
• Stronger position if you need to make decisions or upgrades mid-project
  

Drawbacks for Cash Remodels

• Ties up liquid assets that could be used elsewhere
• Could deplete emergency or long-term savings
• May not be ideal for larger-scale renovations ($250K+) 

Important Tip: If you’re considering paying in cash, we always recommend having a separate emergency fund and a buffer in your renovation budget to cover any unexpected needs or changes, especially if your home is older or hasn’t been updated in decades.

Home Equity Line of Credit (HELOC)

For homeowners who want to keep their savings intact but still access funds, a HELOC can be a flexible, low-interest solution. Think of it like a credit card tied to your home's equity, only with significantly better terms. You’re approved for a certain amount, and you borrow only what you need, when you need it. 

Most Cincinnati-area lenders offer HELOCs with a draw period of 5 to 10 years and competitive variable interest rates. That means your payments can fluctuate, but you’ll typically only pay interest during the draw period.

Why Cincinnati Homeowners Choose HELOCs

• Interest rates are typically lower than personal loans or credit cards
• You only pay interest on the amount you actually borrow
• Great option if you plan to remodel in stages

HELOC Considerations

• Variable rates mean your monthly payments could increase
• You’ll need solid credit and sufficient equity (typically at least 15–20%)
• The line is secured by your home, so it’s important to borrow responsibly

Our clients often use HELOCs in combination with other funding methods, such as partial cash or refinancing later once the project is complete and home value has increased. We’re happy to connect you with local lenders we trust to help you explore options that make sense for your unique situation.

Home Equity Loan (Fixed-Rate Second Mortgage)

If you prefer predictability, a home equity loan might be your best fit. Unlike a HELOC, which acts like a revolving line of credit, a home equity loan gives you a lump sum upfront. This makes it a great match for clearly defined one-time renovations.

Because the loan is tied to your home’s equity, rates are typically much lower than unsecured loans, and you’ll know exactly what your monthly payment will be for the life of the loan. That kind of stability can be especially helpful for families managing multiple financial priorities like college savings, retirement planning, or just day-to-day family expenses.

What Sets Home Equity Loans Apart

• Fixed interest rate and fixed monthly payments
• Ideal for single-scope projects with a clear budget
• May be tax-deductible if used for home improvements (talk to your CPA)

What to Consider Before a Home Equity Loan

• You’ll need to have substantial equity. Most lenders require 80% loan-to-value or better
• Unlike a HELOC, you can’t draw additional funds later
• Interest begins accruing immediately on the full loan amount

Cash-Out Refinance

This option can be powerful if the timing is right. A cash-out refinance replaces your existing mortgage with a new, larger one. The difference between the two is returned to you in cash, which you can use to fund your remodel.

For example, if you owe $250,000 on a home worth $500,000, you might refinance into a $350,000 mortgage and walk away with $100,000 (minus closing costs). That money can go straight toward building your dream kitchen, expanding your footprint, or tackling a long-awaited basement renovation.

When a Cash-Out Refi Makes Sense

• Your current mortgage rate is higher than today’s rates
• You need a significant lump sum for a major remodel
• You plan to stay in your home long enough to justify the refi costs

Potential Cons of Cash-Out Refinancing

• Replacing a low-rate mortgage with a higher one may not make financial sense
• You’ll restart the clock on a new loan term
• Closing costs can be significant, often 2% to 5% of the loan amount

With mortgage rates still fluctuating, this strategy isn't always the move, but for the right household and the right timing, it can unlock the equity you’ve built while still keeping your remodel affordable.

Wondering what your remodel might cost in Cincinnati this year? Check out our complimentary cost guide.

Personal Loan

Sometimes you just need quick, straightforward funding without touching your home equity. That’s where personal loans come in.

These are unsecured loans, meaning they’re not tied to your house, so you won’t risk your property if something unexpected happens. Approval can be fast, and funds are often available in just a few days, which makes them appealing for smaller-scale upgrades or to bridge a funding gap in a larger remodel.

Benefits of a Personal Loan

• Quick approval and funding (ideal for urgent repairs or small projects)
• No home equity required
• Fixed rates and set repayment terms

Important Considerations for Personal Loans When Remodeling

• Interest rates are typically higher than HELOCs or home equity loans
• Loan amounts are often capped, which may not cover a full remodel
• Shorter terms mean higher monthly payments

Home Improvement–Specific Loans

There are also loans built specifically for home upgrades, and they’re worth knowing about.

Government-backed options like the FHA 203(k) or Fannie Mae HomeStyle Renovation loans are designed to help homeowners fund renovations as part of a mortgage. These are often used during home purchases, but can sometimes be applied to current homeowners. However, they come with specific requirements, inspections, and paperwork that can stretch out timelines.

A more streamlined alternative? Working with a local lender who offers renovation-specific loan products tailored to your needs. 

What to Know About Home Improvement Specific Loans

• Tailored for renovation projects, often with favorable rates
• Can sometimes be bundled with refinancing
• Typically require contractor estimates and project plans upfront

At Legacy Builders Group, we’re happy to provide detailed scopes and documents your lender may need. Plus, our in-house architectural designer and project management team make it easier to meet those pre-approval milestones.

Ready to Remodel? Let’s Talk Financing and more for Your Cincinnati Home

If you’re dreaming about a remodel but unsure how to pay for it, we’re here to make it simpler. Legacy Builders Group partners with trusted lenders, offers clear and transparent pricing, and provides everything you need to confidently secure financing.

Whether you’re in Indian Hill, Loveland, Hyde Park, or anywhere in the Greater Cincinnati area, schedule a consultation first to build smart, plan well, and stay rooted in the neighborhood you love.