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8 Tips for Finding a Contractor for Home Renovations

How to Find a Contractor for Home Renovations
Melissa Brock
Melissa BrockUpdated March 7, 2023
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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
You’re ready to start your home remodeling project — now all you need is the right contractor to make it happen. Choosing the proper professional for the job can help make your home renovation go smoothly. So what's the secret to how to pick a contractor for a remodel? Read on to learn how to hire a contractor for home renovations, plus ways to finance the project to make it more affordable.

1. Use Licensed Professionals 

Whether you’re winterizing your home or putting an addition on your house, any contractor you work with should have a state license. Find out what the licensing requirements are in your state. Then visit the website of the state licensing board to verify the license of the contractor and make sure it’s up to date. You can also check the Better Business Bureau to see if any complaints have been lodged against the contractor. This could help you avoid home improvement fraud.

2. Interview Candidates 

When finding a contractor for remodeling, ask your friends, neighbors, and coworkers for good contractors they’ve worked with. Then, based on that feedback, start interviewing potential candidates. Be sure to meet with several contractors to find the best fit.You should feel comfortable working with a contractor and telling them what you want. There should be good communication between both parties. If you feel uneasy with a contractor, move on to a new candidate. 

3. Get Referrals 

If you want to know how to hire a contractor for a home addition, or any other type of remodeling project, talk to people who have worked with them. One of the top tips for home renovation is to ask any contractor you’re considering for referrals. Have them provide you with a list of names and phone numbers of people they’ve worked with previously, and photos of the projects they’ve completed. Call each of the references and ask them about the contractor’s work. Did they do a good job? Was the project done on time and on budget? Was the contractor trustworthy and reliable? Were there any problems? How did they resolve differences? Go see the contractor’s work in person, if you can. This will help give a sense of their workmanship.

4. Contractor Insurance 

Ask what type of insurance the contractor has. In general, they should carry:
  • General liability insurance: General liability insurance, the most common type of insurance, covers against third-party physical injury or property damage claims. It also covers legal expenses if litigation occurs. 
  • Worker’s compensation: This covers employee accidents that occur on the job, including medical treatment, disability, and rehabilitation. 
Ask for the contractor’s certificate of insurance (COI), which should list the contractor’s insurance company, policy number, and policy limits. Call the insurance company and ask whether the contractor’s policy is still in force, whether or not they have adequate coverage (ideally, the contractor should have a minimum of $1 million in liability insurance and worker’s compensation), and if they meet your state’s insurance requirements.

5. Professional Experience

Finding a contractor for remodeling also involves asking about the experience they have. Generally, it’s wise to choose someone who has worked on a large number of projects, over a contractor who just completed a few projects. Also, check to see if the contractor has designations from professional organizations, such as the National Association of Remodeling Industry or the National Association of Homebuilders.

6. Understand Project Details 

How well does the contractor understand your project and have the skills to execute it? Do they specialize in the kind of work you want done, such as a kitchen renovation? If not, you may want to select a contractor who has a lot of experience in that area.

7. Get Bids 

Get bids from several contractors. Along with the total cost of the project, ask for a list of all materials, including their cost, and the cost of labor and other expenses. The prices for everything should be clearly broken down so you understand them. If an estimate is low, the contractor may use cheaper materials or their workmanship may not be the quality you’d like. It’s not always best to go with the cheapest price. Think about what you want most from the project. Recommended: Guide to Getting a $75,000 Personal Loan

8. Understand the Payment Terms

There should be a written contract, provided by the contractor, that outlines all details of the project before the project begins. If the work you’re having done is expensive, consider having a lawyer take a look at the contract to make sure it’s complete. The contract should include: 
  • A detailed description of the work and the prices
  • Information and cost about building permits
  • Payment schedule
  • Start and completion dates for the project
  • Signatures of both parties
Never pay for the entire project before completion. It’s customary to pay for one-third or half of the estimated costs initially, and the balance due upon completion of the project. Be wary of any contractor who requests total payment upfront.Keep a copy of the signed contract.Recommended: A Beginner's Guide to Fix and Flip Loans: Funding Your Real Estate Ventures

Affording a Contractor for Home Renovation

There are several ways to pay for a home renovation, including the contractor. For instance, you could consider putting the renovations on a credit card, getting a home equity line of credit (HELOC), or taking out a personal loan. Here’s more information about each one.

Credit Cards 

You could use a credit card to pay for your home renovation. You may be able to find a card with a 0% introductory APR so that you won’t owe any interest for up to 18 months. However, if you can’t pay off the balance before the introductory period ends, you will need to pay interest on the outstanding amount. And credit cards typically have high interest rates.Also, a credit card might not have a high enough maximum spending amount to finance your entire renovation project. Using a credit card might be best for a smaller remodeling project. 


A home equity line of credit (HELOC) is a line of credit that lets you borrow against your home’s equity up to a certain  limit. The interest rate is variable. Instead of receiving a lump sum, you can borrow HELOC funds as needed during what’s called the draw period, which typically lasts up to 10 years. When the draw period ends, the repayment period begins, which can be as many as 30 years. HELOCs offer flexibility because you can withdraw money as you need it for your renovation project. However, your home serves as collateral for a HELOC, which means that if you fail to repay it, the lender could take your home.

Personal Loan 

Taking out loans for home repairs  is a common way to fund a renovation project. With a personal loan for home repairs, a bank, online lender, or credit union lends you a lump sum that you repay with interest in installments over time. Unlike hard money loans, personal loans are flexible and can be used for almost any purpose.The higher your credit score, the lower the personal loan interest rates you may get. That's why comparing interest rates for personal loans is important. Once you’re approved for a personal loan, you may expect to receive funds quickly, typically within one to five days. Personal loans are available in different amounts. If your renovation is expensive, you can look into a large personal loan. For a smaller project, such as installing a pool, there are pool loans you can check out.

Loan Tips From Lantern

How to find a good contractor for remodeling takes some time and research. Ask people you know and trust for referrals, interview several contractors, check their license and insurance information, and get detailed bids for the work you want done.Then, figure out your payment strategy. Taking out a personal loan can be one way to finance the project, and you can shop around for the best rates and terms. Lantern makes it easy to explore personal loan options. With our online comparison tool, you can get offers from multiple lenders all at once so you can choose the right one for you — and get your home renovation project underway.

Frequently Asked Questions

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Photo credit: iStock/AJ_Watt

About the Author

Melissa Brock

Melissa Brock

Melissa Brock is a higher education and personal finance expert with more than a decade of experience writing online content. She spent 12 years in college admission prior to switching to full-time freelance writing and editing. Her work has appeared on Yahoo Finance, Entrepreneur, Investopedia, The Balance, FinanceBuzz, The Journal of College Admission, MarketBeat, College Finance, Rocket Mortgage, LeverageRx, Benzinga, Morty, Ally, and more.
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