Considering a renovation project for your North Jersey home? While dreaming about stunning timeless kitchens and custom homes, you are probably also thinking about how you will fund your projects. 

There are many different options to pay for construction. Depending on the scale of your project and how much equity you have in your home, you can find an option that works for you. 

Don’t know where to start? Read on to learn the average cost of different remodels in New Jersey as well as your financing options including: 

• Home equity loans 
• Home equity lines of credit 
• Cash-out refinancing 
• Home improvement loans 
• Personal loans
• FHA 203(k) loans
• Savings from energy-efficient government incentives

Average Remodel Cost in New Jersey 

In New Jersey, particularly in Bergen, Morris, Essex, and Passaic counties, the cost of remodeling is higher than the national average. Here are the costs you can expect for different projects: 

Kitchen Renovations can cost between $100 and $800 per square foot depending on the complexity and finish you choose. A cosmetic upgrade to a small kitchen with standard finishes will cost closer to the low end, while a gut reno in a large kitchen with luxury finishes will cost more. 

Home Additions can cost between $125 and $500 a square foot. This depends a lot on your project. A sunroom bump-out may be less than a kitchen expansion. However, many additions require laying foundations, reconfiguring plumbing, adding to your roof, updating HVAC, and adding new windows and doors, which add to the cost and complexity of the project.

Whole Home Remodels will cost between $100 and $800 a square foot. Again, this varies due to the scope of work and chosen materials and finishes. A full gut renovation will generally be between $400 and $800, while updates without structural renovations will cost less, between $100 and $400 per square foot. 

Different Types of Remodel Loans 

Now that you have a general idea of the cost range, consider your financing options. Of course, at White Maple Construction, we focus on the actual remodeling of your home and are not finance experts. It’s best to consult with a financing partner to understand which option is the best choice. 

However, here are some options to help get your research started, with all information accurate as of January 2025. These all have differences in rates and repayment structures. Some are best suited as a kitchen remodel loan or whole home renovation loan, while others may be ideal for a bathroom remodel loan. 

Home Equity Loans 

A home equity loan allows you to borrow against your home’s value. It gives you a lump sum at a lower interest rate with fixed monthly payments. Currently in NJ, the best available rates are in the low-to-mid 6% range. 

Home equity loans are best for folks who have a good amount of equity in their home and are looking to finance a long-term or more expensive project.

HELOCs

A HELOC, or home equity line of credit, also allows you to borrow against your home’s equity. In contrast to a home equity loan, a home equity line of credit allows you to borrow in variable amounts up to a set credit limit. You only pay interest on what you borrow, but the interest rate is variable over time. Currently, in New Jersey, the best rates are in the mid to high 6-8% range. 

HELOCs are good for smaller projects or mid-term financing, as well as projects where you want flexibility for variable costs, like a sunroom addition or finishing a basement. 

Cash-Out Refi 

Cash-out refinancing is a way to refinance your current mortgage and include the cost of your renovation project in one consolidated monthly payment. As with a typical mortgage, you will also be responsible for closing costs, making this a better option for whole home renovations or larger projects where the closing costs won’t make up a significant portion of your total cost.  Currently, cash-out refi rates in NJ are in the high 6-7% range. 

This option is best for long-term projects since it gets added on top of your current monthly payment.

Home Improvement Loan 

Home improvement loans are good for folks without significant equity in their homes. These are a type of personal loan intended to be used for home repairs or renovations. You can typically find secured and unsecured options, which means you may have the option to borrow without using your home equity as collateral. However, these come with a higher interest rate, varying from 7-36%. These also typically max out at a lower amount than the previous options.

This is best for smaller projects like a bathroom where you intend to pay the loan back quickly. 

Personal Loan 

Personal loans are also great for smaller projects. They are very similar to home improvement loans but offer more flexibility for what you can use the funds for. Most personal loans are unsecured, though this will depend on your credit score and other factors. Currently, rates for personal loans are largely the same as home improvement loans, sitting between 7-36%. 

These are also best for small, lower-cost projects with a shorter planned payback period. 

FHA 203(k) 

FHA 203(k) loans enable homeowners or new home buyers to wrap their mortgage and renovation costs into one monthly payment. These loans are government-insured, which offer more flexibility and leniency to the recipient. However, that does mean they have more regulations. These can’t be used for luxuries, have a maximum value based on location, and require an FHA-approved consultant. These require a down payment of at least 3.5% and are subject to market interest rates. 

These can be a good option for new homeowners or folks seeking affordable rates in high-cost-of-living areas. However, they can be limiting and may not cover the full scope of your project. 

Energy Star Rebates

While not a financing option, in New Jersey you can access additional savings for remodels with new appliances if you upgrade them with an energy efficient version. Depending on where you are located, you can get tax credits for heating and cooling systems, washer and dryers, water heaters, windows and doors, and other appliances from Energy Star. 

Ready to Remodel? Get in Touch 

If you have a project on the horizon, get in touch with the experts at White Maple Construction. As a premier New Jersey remodeling contractor, we can advise you on your project, giving you a clear picture of scope and pricing to help you further your financial research. 

We offer free consultations so don’t hesitate to book a call with us to discuss your New Jersey home renovation project.