Are you thinking of doing some home improvements and wondering how to pay for them? As a homeowner, you’ll be glad to know that your mortgage agent can help you access funds through the equity in your home.
With house prices on the rise, more and more people are opting to stay put and make improvements to their current home rather than moving to a larger or more elaborate one.
Home equity is the difference between the current value of your home and the unpaid balance of your current mortgage. Using your home’s equity is a very smart way to finance a remodel or renovations, big or small. Generally speaking, you can access up to 80% of your home’s equity, and the interest rate can be significantly lower than other options, such as through a personal loan or relying on credit.
There are two primary options for borrowing against your home equity – a home equity loan, which provides you with the funds in a lump sum, and a home equity line of credit, known as a HELOC, which allows you to draw money on an as-needed basis. Your mortgage agent can help you determine which option is best for you before you finalize the details with your lender.
Renovations increase home value
Now that you know how to secure the required reno funds, you’ll want to determine the type of improvements you’d like to complete. There are a variety of reasons why people choose to renovate. The most worthwhile investments can lead to a higher resale value when the time comes. Having said that, if you aren’t planning to move in the near future, make sure your renovations are done in a way that makes the most sense for your current enjoyment rather than thinking of future buyers.
Whether you’re looking to improve the functionality of your home, increase its size or simply upgrade certain features, it’s important to know that there are a few key areas you should consider that will give you the most bang for your buck when it comes to increasing your home’s value. Two of the best investments you can make are in your kitchen and your bathroom(s).
Often referred to as the hub or heart of the home, your kitchen is a place where you likely spend a lot of time with friends and family. An updated kitchen can make a significant difference in your home’s value so it makes sense to invest in updates such as cabinetry, countertops, lighting and appliances, which will not only benefit you and your family while you live in the house, but will also appeal to potential buyers down the road.
And, when it comes to updating the bathroom, replacing the vanity, flooring and tub and/or shower can really increase your home’s appeal. Other cosmetic improvements such as fresh paint, new lighting or tap fixtures can also add a certain ‘wow’ factor. If you live in a home with only one bathroom, find out how feasible it would be to add a second option (without a complete overhaul of your existing layout).
There are many types of projects you can do that will enhance the appeal and increase the value of your home. Renovations can be exciting, and bells and whistles enticing, but keep in mind that you don’t need to go overboard. Make sure your plans are practical and affordable – relatively moderate improvements can easily create the fresh and inspiring look and feel you’re seeking while providing a wise return on your investment. So, get ready to renovate and make sure your home is working for you!
Have questions about accessing home equity for reno funds, or your mortgage needs in general? Answers are just a call or email away!