The beginning of each year is traditionally a popular time for homeowners to seriously think about improvements they want to make to their home. Even though it’s wintertime, many people aspire to complete home improvement projects before summer begins.
Because mortgage interest rates are currently low, and the value of many homes has increased significantly over the past several years, numerous homeowners are considering tapping into their home’s equity to pay for home improvements. If you have equity in your home and would like to use it to pay for a kitchen or bathroom remodel, now might be the opportune time to take advantage of low mortgage interest rates.
If you decide to use a home equity line of credit (HELOC) to pay for your home improvement projects, you might be concerned about which projects will potentially add value to your home, and which will not.
Following are some home improvement projects that typically do add value to a home:
Basic home maintenance. If you have been putting off basic home maintenance for months or years because the cost of maintenance has not been a part of your regular budget, this is the first place you should start. When your home is in poor condition, its value is going to be diminished. You should make it your priority to make sure the exterior and interior of your home are up to par with other homes in your neighborhood before thinking about larger and “elective” home improvement projects.
Kitchen and bathrooms. Real estate agents often say that home improvement projects that are most worthwhile are kitchens and bathrooms. Kitchens are a focal point in a home, and original bathrooms can make a home show its true age. While you might not get 100 percent of your investment back if you elect to sell your home, well-done kitchen and bathroom remodeling projects are always seen as a positive.
Adding square footage. Adding living space to a home is a great way to increase a home’s value. However, it’s important that all home additions are handled by a knowledgeable contractor and the construction is completed to code and with a permit.
If you have been thinking about making improvements to your home, now is a great time to seriously consider moving forward with your ideas. With home values at a high and mortgage interest rates at a low, a home equity line of credit might provide you with all the funds you need to complete the home improvement projects you have been wanting.