While a remodel changes the shape of something (like adding a new shower to an existing bathroom), a renovation focuses more on restoring something old so that it's in good shape (for example, fixing a creaking floor). Renovation and remodeling have important differences in terms of time, cost, and funding method. That's not to say that remodeling isn't the smart option in your situation, as every situation is unique. Because renovation usually costs less and because it involves repairing and updating the basic features of a home, homeowners often see a better return on investment in renovation projects than in remodeling projects when they sell their house.
A remodel can include raising the ceiling, moving a bathtub to a new wall, adding an extension or a new room, or even installing a kitchen island with plumbing and electricity. You can see why these terms confuse people, considering that many people would say they are remodeling a room when in fact they are renovating. There are many ways to finance remodeling and renovations, but many homeowners choose a personal loan, a home equity loan, or a home equity line of credit (HELOC). In some cases, you may choose to do a major remodel instead of buying a new one due to rising real estate prices.
This type of loan works well for large renovations, since you can borrow a significant amount of money at a low interest rate. Before embarking on a new project, it's important to understand the differences between a remodel and a renovation. Many people use the terms renovate and remodel interchangeably when they talk about updating their homes. While it might not matter when you talk to your friends about planned changes to your home, it's probably a good idea to be a little more specific with terminology when you talk to a remodeling contractor and consider what your home needs and how much it's going At a cost.
A renovation means updating an existing structure with aesthetic changes, while a remodel involves changing the structure through demolition and construction, explains Jason Larson, founder and president of Lars Remodeling & Design in San Diego, California. Remodeling is more expensive because it involves more than just changing the surface: it involves construction and modifying designs and moving pipes and wiring, among other things. In short, remodeling is a larger job that involves some construction and, possibly, changing the design and purpose of a space. Many people who do expensive home remodels or renovations choose HELOCs over home equity loans because the former provide them with more financial flexibility.
