Last Updated on October 1, 2026
8 Smart Ways to Use a Renovation Loan to Increase Home Value
Whether you are looking at a “diamond in the rough” or your current home is starting to feel a bit dated, financing your vision is the most important part of the project. Many homeowners make the mistake of relying on high-interest credit cards, but there is a more integrated solution.
In a recent “Home School” session, the experts at loanDepot broke down the 8 best ways to use a renovation loan to build your dream home and increase your property value.
Key Takeaways
- A renovation loan allows you to combine the cost of home improvements with your mortgage into one monthly payment, often offering better rates based on the home’s future value.
- High-return on investment projects like kitchen remodels and new flooring are highlighted as key ways to significantly increase home value and market appeal.
- The loan is versatile and can be used to purchase and customize a fixer-upper or to roll remodel costs into your existing mortgage for your current residence.
- Eligible projects are not limited to the interior and can include major exterior upgrades, such as new windows, doors for energy efficiency, or even installing a pool.
What is a Renovation Loan?
Unlike a standard personal loan, a renovation loan allows you to combine the cost of your home improvements with your mortgage into one simple monthly payment. This streamlined approach often offers better interest rates and higher borrowing power based on the future value of your home.
8 Smart Ways to Invest in Your Home
1. The Heart of the Home: Kitchen Remodels
The kitchen is consistently the most used area of any house. loanDepot highlights kitchen repairs or remodels as a top choice for those looking to significantly increase home value.
2. Purchase a Fixer-Upper
For first-time homebuyers, a renovation loan is a “secret weapon.” It allows you to buy a house that needs work in a high-demand neighborhood and customize it to your liking from day one.
3. Update Your Current Residence
You don’t have to move to find your “happy place.” You can build it. A renovation loan lets you freshen up your current space by rolling the remodel costs into your existing mortgage.
4. Modernization
If your home’s aesthetic or technology is stuck in a different decade, these funds can be used for essential modernization updates.
5. Fresh Paint: Interior & Exterior
Never underestimate the power of a new coat of paint. It is one of the most cost-effective ways to change the look and feel of your property.
6. Energy Efficiency: Windows & Doors
Replacing old windows and doors isn’t just about looks—it’s about energy efficiency and security. Treatments and replacements are a smart use of renovation funds.
7. New Flooring
Alongside kitchens, new flooring is highly recommended by experts if your goal is to boost your home’s market appeal and equity.
8. The Great Outdoors: Backyard & Pools
Your renovation loan isn’t limited to the interior. You can use it for major exterior repairs and upgrades, such as redoing your backyard or even installing a new pool.
Expert Guidance from loanDepot
The applications for a renovation loan are virtually endless. As the team at loanDepot explains, these loans are powerful tools for big projects that would otherwise be difficult to cash-flow.
Because these loans involve complex appraisals and construction timelines, having a lender who is “pretty good at what they do” is essential for a smooth experience.
Ready to Start Your Project?
Don’t let the cost of improvements hold you back from the home you deserve.
Take the Next Step:
- Watch the Lesson: See the full breakdown by watching the video above.
- Get a Consultation: Reach out to a loanDepot specialist today to see how much you can qualify for in renovation funds.
Transcript: 8 Smart Ways to Use a Renovation Loan to Increase Home Value
In this “Home School” session, loanDepot explores eight practical and strategic ways to utilize a renovation loan. These loans are versatile tools that allow homeowners to fund improvements by combining project costs with their mortgage.
8 Smart Ways to Use a Renovation Loan
- Kitchen Repair or Remodel: Often the most used area of the house, updating the kitchen is highlighted as a top project for increasing overall home value [00:09].
- Buying a Fixer-Upper: For first-time buyers, a renovation loan can be a strategic way to afford a home in a desirable neighborhood by purchasing a property that needs a little work [00:22].
- Renovating Your Current Home: This allows you to “build your happy place” without moving. The loan combines the renovation costs and your existing mortgage into one simple monthly payment [00:39].
- Modernization: Perfect for updating a home that has become dated over the years [01:02].
- Interior and Exterior Painting: A straightforward way to freshen the appearance and protection of the property [01:09].
- Windows and Door Replacements: Useful for improving energy efficiency, security, or aesthetic appeal [01:13].
- Flooring: Similar to kitchen remodels, replacing flooring is a highly recommended project for those specifically looking to boost their home’s market value [01:16].
- Exterior Repairs and Upgrades: This covers major outdoor projects, such as installing a new pool or redoing the entire backyard [01:25].
The video concludes by noting that while these eight are the most common, the potential applications for renovation loans are nearly endless [01:38].
