Financing a home remodeling project requires careful planning, especially since your home likely represents one of your largest investments. At Lamont Bros., we routinely guide Portland homeowners through various financing options on a daily basis.
This article outlines our proven process for securing home improvement financing. Whether you work with our company or another contractor, these steps will help you determine the right financing approach and amount for your specific project needs. We’ll explore seven key steps that have helped countless homeowners successfully fund their renovations.
- Assemble Your Team
- Establish Your Budget
- Meet With Your Loan Officer
- Apply for Prequalification
- Design Your Remodel
- Finalize The Contract Cost
- Finalize Funding
For personalized guidance on your home remodeling financing options in 2025, contact our team. We’ll walk you through current rates, lending programs, and strategies tailored to your renovation goals.
Step 1. Assemble Your Team
The best way to ensure that you can successfully finance your home improvements is to involve your remodeling team from the start of the financing process. Collaborating with professionals who understand the intricacies of both design and budgeting ensures that you make informed decisions while exploring the best ways to finance home improvements.
The process that our team has found most effective involves forming a partnership between the homeowner, the remodeling company, and the finance lenders. This approach allows each party to share their expertise and collaborate to find the best solution for the homeowners’ needs.

Step 2: Establish Your Project’s Budget Range
Before you begin exploring financing options, you’ll want to meet with a professional remodeling team to establish a budget range. A remodel design consultant can provide you with an approximate remodel budget based on your vision for the project.
Keep in mind that this is only an estimate of the total cost of your project, and the total cost may be more or less than the initial range quoted. The purpose of establishing this budget range is to help you decide whether you want to move the project forward and provides you enough information to begin discussions with a finance officer for your home improvements.
Step 3: Meet with a Loan Officer
Once you know approximately how much your remodel will cost, you can then explore your financing options with a loan officer.
While there are many different forms of financing that can be used to finance a remodel, there are three common types of loans we see most often.
It’s important to establish which one will work best for the project you’re planning. The price and construction process of your remodel will affect which financing options work best for you, which is why it is important to know your budget range before.
Option 1: Home Equity Financing
When your house is worth more than what you owe on it, you have equity. A home equity loan can help you access the money that is tied up in your home’s value and use it to finance various home improvements. This type of loan is often referred to as a “second mortgage,” because it essentially functions as an additional mortgage on the home.
Home equity loans financing is especially popular among homeowners who currently have a low interest rate on their first mortgage. Homeowners who have managed to secure low interest rate rarely want to renegotiate the terms of their original mortgage. Instead, they more often choose to finance their home improvements through a second mortgage to keep the interest rate low on the first one.

Option 2: Home Refinance
A cash out refinance is still in many ways a home equity loan. The biggest difference is that with this option, you combine your existing mortgage and equity loan into a single consolidated loan. A cash-out refinance can be a simple and convenient way to finance home improvements, particularly if you were already considering refinancing your home.
Opting for a cash-out refinance is an especially great option when mortgage rates are low. This is because it enables you to refinance your home at a reduced rate while also obtaining funds for a renovation. However, when interest rates are high, a cash-out refinance can significantly raise your monthly mortgage payment.
Option 3: Renovation Loan
Unlike an equity loan or refinance, a renovation loan allows you to borrow money based on the value of the improved home. For this reason, renovation loans are a great choice if you haven’t yet built up enough equity to be able to cover the cost of the renovations. There are 2 main types of renovation loans: federal and private.
Federally backed renovation loans, such as the Sallie Mae HomeStyle Loan, have smaller down payment requirements, but come with more regulations and hoops to jump through. On the other hand, private loans tend to have higher down payment requirements than federal loans, but offer a more flexible and personalized funding experience.

Step 4: Get Prequalified
After you’ve selected loan to finance your home improvements, you’ll then need to get pre-qualified. Prequalification is a credit estimate that shows lenders how much financing you can safely secure. It serves as confirmation that you are financially able to fund your remodel.
Here’s what you’ll need in order to get prequalified:
Employment History
Providing detailed employment and income history demonstrates financial stability and repayment capacity. This allows lenders to assess your eligibility and determine the lending amount you qualify for.
Typically, you’ll want to provide paystubs going back at least 2 years that demonstrate a steady income. The lender may also contact your employers to confirm the information you provide.
Assets, Debts, & Expenses
The lender will typically request you to share financial information, including assets, debts, and expenses. Information like this allows lenders a comprehensive view of your financial situation, allowing them to evaluate your debt-to-income ratio and judge ability to handle loan obligations.
Credit Check
A credit check assesses creditworthiness through reviewing your payment history, credit utilization, and credit score. It influences loan terms and interest rates. This is why providing accurate credit information is crucial for getting the best prequalification terms possible.
Step 5: Design Your Home Improvements
You and your design team will collaborate to develop a set of design plans for your renovation project. As your designs take shape, you’ll get to make specific decisions on the layout, materials, and appearance of your renovation.
Every renovation company handles the design process a little differently. Regardless of which contractor your hire, it’s important that they take an active role in keeping the project from exceeding the budget parameters established previously in the process.
Throughout the design process, a good contractor will consistently update and track projected costs for the renovations. This way, you run less of a risk of getting to the end of the design process and having a final cost that far exceeds your approved lending amount.

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Step 6: Finalize Cost
Now that the design plans are complete, your build team will calculate the total cost of the project. If you work with a firm like Lamont Bros. that uses a fixed-cost contract, you’ll lock in your price once you sign the contract.
This step ensures that you have a clear understanding of the project’s financial aspects so you don’t encounter any surprises or exceed your approved lending amount. Without contractually confirming your construction costs up front, it can be more difficult to secure financing.
Step 7: Finalize Loan
Once your remodel has a set dollar amount tied to it, you’ll be ready to finalize your financing. It’s important to review the loan terms, interest rates, repayment schedule, and any associated fees or conditions carefully. Working closely with your lender and providing any additional documentation or information they require will ensure a smooth and timely loan approval process.
Once your loan is finalized, you can confidently move forward and witness your remodel take shape, knowing that the necessary funding is in place to support the project.
Finance Your Home Remodel
We’ve outlined the seven essential steps to finance your home renovation, from assembling your team to finalizing your loan. This proven process has helped countless homeowners turn their remodeling dreams into reality.
Ready to explore your options? Our design team will guide you through financing solutions while helping you craft the perfect renovation plan for your home.