How to finance home improvements
Are you itching to improve your home? If so, you’re not alone. Most homeowners take on some sort of home improvement project at some point while living in their house. There are many reasons to renovate your home, such as improving the house’s functionality, increasing its value and creating a healthier atmosphere for family members.
Three reasons to renovate
More than one-quarter of homeowners who renovate their homes aren’t planning on selling anytime soon, MarketWatch reported. This means they will personally be able to enjoy their upgrades.
What sort of projects do most homeowners under take? According to Porch, residential construction is by far the most popular home improvement project to take on. This can mean several different things, including:
- New home construction
- Building additions
- Major home renovations
Higher resale value
A panel of 303 real estate professionals told Consumer Reports some of the best things home sellers can do to improve their profits. On average, the right projects can increase a home price by 12 percent.
If you want to increase your home’s value, three key areas to focus on are the kitchen, bathroom and exterior. Buyers pay close attention to kitchens and bathrooms, so if they are high quality, the buyer will likely be more drawn to the home. The exterior of a home is the first thing potential buyers see when they view the house. That first impression is important. If they are disappointed by the outside, they’ll enter the home with that predisposition.
There are some key home improvements that can improve the health of family members. For instance, people with allergies or asthma may find that changing from carpeting to hardwood or tile can help eliminate allergens or irritants that get caught in carpeting fibers, according to Pro Referral.
Other renovations could encourage healthier behaviors, such as upgrading a kitchen to entice family members to cook more meals from scratch, or installing a home gym that allows people to conveniently exercise.
Financing a home improvement
Depending on the renovation, the price can range from a few dollars to hundreds of thousands. While it’s possible to fund small projects with savings, it’s common for homeowners to obtain financing, such as personal loans or home equity lines of credit, for larger home improvement projects.
A SunTrust survey found that fewer people are dipping into their savings to pay for residential upgrades, MarketWatch reported. They may have other plans for their savings: retirement, a child’s college education or another long-term goal. Using savings to make a home improvement, however important it is, doesn’t always make the most sense, especially when loans are available.
MarketWatch also noted that not many people use income from investments for home improvement projects, either. If a stock is performing well, for instance, it may make sense to allow it to continue to increase in value, rather than liquidating it.
Additionally, taking out a consumer loan and paying it off responsibly can improve your credit score by solidifying your payment history.