How to Choose Between Remodeling and a Renovation

Renovation Mistakes

Whether you’re contemplating changes to your current home or eyeing a property for renovation purposes, the decision between remodeling and renovating is pivotal. While the terms may be used interchangeably in casual conversation, they entail distinct processes with varying costs and outcomes. Both remodeling and renovating aim to uplift your living space, but understanding their disparities can significantly impact your budget and project direction.

This blog helps you choose between renovation and remodeling while comparing the benefits of a home renovation loan vs. a home equity option for financing your home transformation.

Renovation vs. Remodel: Understanding the Difference

Renovations are akin to giving your home a facelift or restoring it to its former glory. These projects typically involve restoring its aesthetics and functionality without altering its fundamental structure. Renovation often involves smaller-scale updates compared to remodeling projects. Examples of common renovations include:

  • Updating kitchen countertops
  • Refurbishing bathroom fixtures
  • Replacing old appliances with new
  • Adding stylish hardware
  • Upgrading HVAC systems
  • Repainting walls
  • Installing crown molding or baseboards

On the other hand, remodeling ventures into more extensive territory by fundamentally altering a home’s structure or layout. Remodeling projects are transformative and aim to redefine the spatial dynamics of a home better to match occupants’ needs and preferences. Examples of common remodeling projects include:

  • Converting a basement into a living space
  • Creating a home office or study area
  • Adding a second story to the house
  • Knocking down walls for an open layout
  • Creating a custom-built closet or storage area
  • Building a deck or patio for outdoor entertainment areas

Breaking Down the Costs: Renovation vs. Remodeling

Renovations are generally more budget-friendly compared to remodels. Depending on the scope of the renovation, costs can vary from a few hundred dollars for simple updates like repainting and replacing fixtures to several thousand dollars for more extensive overhauls.

In contrast, remodeling projects are more extensive and, therefore, tend to be more expensive. Remodels may involve structural alterations, reconfiguring room layouts, or even expanding the overall square footage of the property. The costs of remodeling can range from several thousand dollars to well over $100,000.

Factors influencing renovation and remodeling costs include:

  • Materials chosen
  • The size of the space being renovated
  • Labor, contractor, and consulting fees
  • Need for professional assistance (e.g., architects, electricians, plumbers)
  • Permits required for remodeling projects
  • Demolition and disposal
  • Timeline

What are Your Financing Options for Remodeling and Renovations?

When considering how to finance your home improvement project, you may weigh the benefits of a home renovation loan vs home equity options.

  • Home Improvement Loans

Home improvement loans are personal loans without collateral. They usually provide a lump sum of up to $100,000, with repayment terms spanning two to 12 years. The loan amount and interest rate are determined based on factors such as your credit score, debt-to-income ratio, and income. While home improvement loans don’t require collateral, missed payments can affect your credit score.

  • Home Equity Options

If you’ve built up equity in your home, leveraging it through a home equity loan or line of credit can offer favorable terms for your renovation or remodel. Home equity loans provide a lump sum secured by your home’s equity.

However, a home equity line of credit (HELOC) provides flexibility, allowing you to borrow as needed within a predetermined credit limit based on your home’s equity. With both options, you can typically borrow up to 90% of your home’s value (minus your mortgage balance). While these options offer lower interest rates and longer repayment terms, it’s important to remember that your home is used as collateral, risking it if you fail to repay the loan.


Deciding between a renovation and a remodel is a significant choice that hinges on various factors, including your budget, timeline, and long-term goals for your home. Consider the current state of your property, your financial capacity, and the potential impact on your home’s resale value.

If you’re aiming to enhance your home’s appeal for a future sale, a targeted renovation focusing on key areas might suffice. Conversely, if you’re envisioning your property as a long-term investment and seek substantial changes to improve functionality and aesthetics, a comprehensive remodel could be the optimal choice.

Are you an Entrepreneur or Startup?
Do you have a Success Story to Share?
SugerMint would like to share your success story.
We cover entrepreneur Stories, Startup News, Women entrepreneur stories, and Startup stories

Read more business articles related to Sales, Marketing,  Advertising, Finance, Entrepreneurship, Management, Education, and Industry at SugerMint.