GRAND RAPIDS, Mich (WOTV) – No matter the purpose of your home improvement, it’s a good idea to consider how it will impact the value of your home. With home values where they are, many people are looking at ways to either add value, do necessary maintenance, save with energy efficiency, or simply add some quality of life into their homes.
WHERE DO YOU START?
First: Research your project
What’s the scope of your project? The more you know about what your specific home improvement project entails, the more ably you can evaluate appropriate products and proposed services. This tip holds true for something as “simple” as interior painting and re-carpeting all the way to planning an extensive remodel or expansion to your home.
Second: Estimate the total cost of your home improvement project
Estimating the cost of your project is critical in determining the required size of your home improvement loan and which financing option will work best. Make sure to get estimates from several contractors to ensure you are getting a reasonable price. Make an allowance of about 10 percent in determining your ideal loan amount, as unexpected costs may arise during the renovation.
Third: Meet with your lender and discuss the best option to finance your home improvement project.
There are a number of ways to finance your home improvement project and it’s in your best interest to discuss honestly with your lender what the best avenue is for you. Consider:
- A Mortgage, used as a cash-out refinance, can provide you with the needed money to renovate, remodel, and more, while keeping you in a low interest, one monthly payment option.
- A Home Equity Loan or a Home Equity Line of Credit (HELOC) can also provide you with the needed money. Both equity options are loans secured by a second mortgage, allowing you, the home owner, to borrow against the equity in your home. A Home Equity Loan is a closed end loan meaning you receive a lump sum at loan closing with fixed monthly payments and repayment terms. A Home Equity Line of Credit is an open-end loan meaning you have access to the available maximum loan balance throughout the length of the loan and you can use the money as needed.
- In addition to both mortgage and equity options, there are other options such as a Home ReStyle loan. A special ReStyle loan can be used for small home repairs, new furniture, new appliances, remodeling, landscaping, and more.
- A VISA card with low interest options may work for some of those smaller improvements.
Certain projects add more resale value than others. Here are some that generally have the best financial impact:
- People like to see modern conveniences and styles in the kitchen. Especially in older homes, kitchen improvements tend to add value.
- Second to kitchen remodels are bathroom remodels. Again, modernizing older styles or appliances usually results in good return.
- Outdoor improvements. If you’re selling, remember your house makes a first impression quickly, so sprucing up its outdoor appearance is a smart investment. This includes siding and landscaping.
- Roofs and windows. Roofs and windows are expensive to replace, and buyers expect these to be in good condition. Unfortunately, that means that while replacing them won’t dramatically increase resale value, not replacing them could significantly decrease it.