You may have a checklist of changes or improvements that you would make to your home if you had the extra money to do so. One way to tackle this list is to break it down into smaller projects and work through your list bit by bit. However what is stressful about this approach is that your home can become chaotic and be messy for a longer period of time. This makes it hard to enjoy each small improvement as you are dealing with the mess of the next one.
A better way to tackle your list is to bite the bullet and just get everything done at the same time. This will cut down on the time that your home is in upheaval, and add more value to your home in a shorter amount of time. But not everyone has the money upfront for a larger project, so what can you do? Financing a home remodel could be just the answer that you are looking for.
What is a Home Equity Loan?
A home equity is a loan that is based on the equity that you already have in your home that your lender will use as collateral. The amount that you can borrow is based on the value of your home and property. This value is determined by the lender’s appraiser and then used by the lender to determine the amount you are eligible to borrow.
What is great about financing a home remodel with a home equity loan is that the value of your home will continue to rise over the years. This is ideal if you plan to stay in your home for five years or more. If you have decent credit, the payments for a home equity loan can be very affordable. Meanwhile, with the home improvements you have made with the proceeds of your loan will add additional equity and value to your home. This means that when you decide to sell your home, the improvements made can help you get a better price. Your improvements will eventually pay for themselves.
Projects with the Best Return on Investment
Most home improvement projects will add value to your home, but some add more value than others. According to Remodeling’s 2015 Cost vs Value Report, the following top projects will provide the best ROI:
- Garage door replacement – 88.4 percent
- Adding a wooden deck – 80.5 percent
- Minor kitchen remodel – 79.3 percent
- Adding an attic bedroom – 77.2 percent
- Vinyl window replacement – 72.9 percent
- Basement remodel – 72.8 percent
- Bathroom remodel – 70 percent
- Major kitchen remodel – 67.8 percent
- Adding a family room – 64.1 percent
- Adding a bathroom – 57.8 percent
Currently, interest rates are low for well-qualified homeowners seeking home equity loans for a home improvement project. If you’ve been putting off tackling your list of home remodeling projects, what are you waiting for? Now is a great time to start by financing your home remodel.