How to Afford a Home Improvement

Home improvement

Home improvement, also known as renovation or remodeling, refers to any activity that enhances the value and quality of an existing residential property. This may include upgrades to the electrical and plumbing systems, masonry or concrete construction, exterior work such as painting or roofing, garden work, garage and shed maintenance or additions, and other improvements.

Home Improvements and the Real Estate Market

The home is often the single largest asset a person owns, and investing in a variety of improvements can significantly increase its resale value. But a lack of liquidity can make it hard to afford large, expensive projects, so it’s important to be careful about how you spend your money.

Getting Help With Your Project

The best way to finance a home improvement is to use your home equity, either through a home equity line of credit (HELOC) or a personal loan. HELOCs are typically secured by your home and allow you to borrow up to 85% of its value, minus the outstanding balance on your mortgage. However, it may be more difficult to qualify for a HELOC if you don’t have a significant amount of equity.

How to Choose the Right Loan for Your Project

Whether you’re renovating your kitchen or repairing your roof, it’s important to select a loan that fits your needs and budget. For minimal upgrades, a credit card with an introductory 0% APR period can be a great option.
If you’re unsure which loan will be the best fit, talk to a financial advisor to learn more about your options. They can help you determine how much home equity you have, and which loan types will offer the most flexibility and value.