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Couple enjoying breakfast on floor of new, remodeled kitchen

Kitchen Remodel Financing: 7 Steps for Everything You Need to Know

6-Minute Read

If you have kitchen ideas circling around in the back of your mind, perhaps adding more storage or stainless steel appliances, then now's the time to take action! Remodeling your kitchen can make entertaining easier and add considerable value to your home.

Many lenders will fund your project as long as you have enough equity established in your home and a decent credit rating. And if you want to finance a remodel of your kitchen as quickly as possible, our step-by-step guide will tell you exactly how to go about financing the kitchen of your dreams.

Understand Your Goals, Budget and Return on Investment

The rumors are true: Kitchen remodeling is expensive. In fact, the total cost of a kitchen remodel runs from about $12,500 to $33,000, leaving the average spending amount around $21,000. This is where refinancing can help if you want to invest in your home and give your kitchen a general facelift.

However, don’t forget to do your homework ahead of time, as refinancing isn’t the only solution to add value to your home. Compare costs with home improvement professionals in your area, or if you’re the DIY type, price every inspiration out for yourself.

It’s also a good idea to consult with a realtor to make sure that your kitchen project will get the actual return on investment you’re hoping for. If adding a kitchen that runs into six figures won’t be good for resale, you might want to consider scaling back.

Choosing the Right Financing Solution for You

As you began browsing countertops and faucets, it’s easy to feel overwhelmed by the number of choices available to you. Same with project financing. But that’s why we’re here! Here, we’ll lay out all the financing possibilities so you can decide what is the best fit for you and your soon-to-be-upgraded home:

Home Equity Loan

A home equity loan is a second mortgage, with a separate payment, that allows you to borrow against the equity in your home. In other words, your home equity loan doesn’t alter the terms of your first mortgage – it simply adds on a second payment with separate terms. Home equity loans tend to have higher interest rates than first mortgages and the maximum amount you can borrow varies.

Depending on the lender, you’ll typically be able to borrow between 75% and 90% of the value of your home. And once you close on your home equity loan, you’ll receive a lump sum payment from your lender.

Personal Loan

A personal loan is an unsecured installment loan with a fixed interest rate that is repaid in equal monthly payments. You receive a lump sum and pay it back in fixed monthly payments, typically over 36 to 60 months.

Select a loan offer that comfortably matches your expected financial situation and gives you plenty of extra cash for unanticipated events.

Cash-Out Refinance

A cash-out refinance means that you refinance your mortgage for more than you owe and take the difference in cash. The more equity you’ve built up, the more money you can convert to cash. Equity refers to how much you owe compared to the value of your home.

For example, let’s say your kitchen remodel will cost you $25,000. Your home is worth $300,000 and you’ve paid your mortgage balance down to $235,000. To calculate how much equity you have, simply subtract your mortgage balance from your home value. This leaves you with $65,000 in equity.

You won’t be able to take out all of that, however. Assume your lender will only allow you to refinance 80% of the value of the home. That means $40,000 stays in the home, and you take out $25,000 in cash.

What Should I Know Before Applying?

Watch this video to learn more about our financing process and personal loan application: 

Securing a Personal Loan for Your Kitchen Remodel

Say you’ve decided to make the leap and want to take out a personal loan to help cover the financing (our specialty!). Here are the simple steps you will need to take to apply for a personal loan with us.

Step 1: Fill Out Our Simple Application

Once you complete our online application form, you will see pre-approved offers for your kitchen remodel project.

When you check out the form on that page, you will notice that you only need to enter and verify some easy personal questions. Most people already have this information memorized, so you shouldn’t need to gather any documentation at this stage.

The basic personal information that we need from you includes:

  • Your full legal name
  • Address
  • Birthdate
  • Social Security number (SSN)
  • Your individual income
  • Employment status
  • Email address
  • Phone number

Once you’ve finished filling out the form (it should only take about a minute or so) you need to submit and go on to the next step toward funding your kitchen remodel.

Step 2: Review the Loan Options for Which You Qualify

At Rocket Loans, we use the personal information you submitted to immediately give you a list of loan options that could qualify for funding your kitchen remodel. Once we present your pre-approved offers, it's up to you when selecting the financing option that best suits your situation.  

Regarding the loan repayment period, make sure you select an affordable amount/timeline to you both now and into the foreseeable future. Even though you may want to remodel your kitchen now, avoid taking on more ldebt that you can comfortably manage by choosing a borrowing option with a sensible repayment schedule that fits your income level.

In most cases, selecting a loan option will involve choosing one that covers the amount needed for the project and has the lowest fixed interest rate available. Keep in mind that variable interest rates are typically lower than fixed interest rates, but unlike fixed interest rates, there are no guarantees that they will remain affordable for you over time.

Step 3: Provide Lender-Requested Validating Documentation

Now, when you’re ready and have a loan offer in mind, it’s time to officially apply for it.

Once you’ve selected your optimal loan, you may have to produce the standard documents to validate your loan request. Virtually all lenders require applicants to go through this validation step to process a loan application. But by logging into your bank account on our website, we reduce a lot of the paperwork most other lenders require.

We need you to safely authenticate your identity. This ensures that you are the individual whose name will appear on the loan and helps weed out identity thieves. You may also be required to share proof of the employment and income details you filled in, so be prepared to show pay stubs and tax returns.

It can speed things up to have these documents ready ahead of time but note that not every loan requires the same documents for validation.

Step 4: Agree to Terms

After you’ve completed the application validation process, we will give you a set of lending terms to look over and agree to move ahead with a loan.

Once you agree to our terms, we will begin the loan approval process with the goal of getting your personal home improvement loan approved as soon as possible so you can borrow the funds you want for your kitchen remodel. Final loan approval is also when we complete a hard credit pull that will affect your credit score.

Step 5: Get Your Loan Funds Paid

When your home improvement loan gets its final stamp of approval, your loaned funds get deposited directly into your bank account.

We realize how importance of getting that money for your kitchen project fast, so you can expect a timely response. Depending on the circumstances, you may even receive your home improvement loan proceeds in your bank account the same business day.* Still, some banks and fund transfer methods can take more time.

Step 6: Start Remodeling Your Kitchen!

Once you’ve obtained the home improvement loan funds you require for your kitchen remodel, you can start taking the practical steps you need to take to get your project underway. These steps can vary depending on what sort of kitchen remodel you chose for your home.

Unless you are a HGTV buff and/or have relevant design and building skills, you may need to enlist the professional assistance of a kitchen expert to plan and implement your kitchen remodel. If you do decide to hire a home improvement professional, create a schedule for your project’s timely completion that will suit you both.

Step 7: Pay Back Your Loan

When you use your available credit to borrow money, remember you have to pay it back in a timely fashion if to retain a favorable credit rating. To help, you can repay your home improvement loan using a simple autopay option.

Repaying your loan electronically using the autopay feature means your monthly payment will be automatically withdrawn from your bank account with no work or stress on your part!

If you want to make any extra payments to reduce your loan balance, you can do that whenever you’d like without paying a prepayment penalty. This great feature means if you come into some unexpected money and want to pay off all or part of your home improvement loan early, you can avoid unnecessary interest expenses or early payment fees.


Start on your kitchen remodel right away by getting a fast home improvement, personal loan that makes sense for you.

Apply for a Personal Loan.

Explore your options today and see what's possible in one simple click.

*Same Day Funding availability for loan amounts up to $25,000, and client must complete loan process and sign Promissory Note by 1:00PM ET on a business day. Also note, the ACH credit will be submitted to your bank the same business day. This may result in same day funding, but results may vary and your bank may have rules that limit our ability to credit your account. We are not responsible for delays which may occur due to incorrect routing number, account number, or errors of your financial institution.

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