Home Improvement Financing

Consider using home equity to finance major home improvements

Planning a new addition or major home renovation can be a fun task. Checking out design magazines and blogs to get an idea of what you'd like to do with your space, and thinking about the little accents you can pick up to make the design your own can unleash your creativity.

Major renovations will probably require a home improvement loan or other financing. Here, you have two options:

  • A home equity line of credit (HELOC) is home improvement financing that borrows against your equity at an adjustable interest rate. It's like a credit card, allowing you to take out only what you need. This may make the most sense if you're planning incremental changes and don't yet know the full scope of the project.
  • If you do have plans to start many changes at once, you may prefer a home equity loan, which provides you a lump sum with a fixed interest rate.

Either way, both of these lending options will let you tap the equity in your home so you can start your home improvements.

Plan out major home improvements and get quotes from multiple contractors

Looking for inspiration? Here are some remodeling ideas that can add value to your home. Major home improvements typically require advanced planning due to the number of things they impact, from the layout and structural integrity of your home to the plumbing, electricity and more:

  • Addition to the home: Prepare for a new baby, in-laws, guests or just a sun room with a home addition.
  • Kitchen remodel: Renovate your kitchen with a new layout, energy-efficient appliances and more counter space.
  • Remodeling the master bedroom, bathroom or suite: Give your bedroom a makeover with new hardwood floors and a new bedroom set.
  • Apartment over the garage: Earn a little extra income by renting out a garage apartment.
  • Finished basement or basement apartment: Create a bonus room for the kids or a space for your in-laws.
  • Roof repair or re-tile: Fix leaks or install an energy-efficient metal roof
  • Flooring installation: Lower energy costs with radiant flooring throughout the house.

There are many home improvement projects for the do-it-yourselfer out there, but taking on a major home improvement project may require hiring an outside contractor. Before you do this, plan out your renovation, get an idea of the cost of materials and secure quotes from multiple contractors.

Be cautious about financing for home improvements that are overly luxurious or niche

While the above renovations can usually be counted on to boost your resale value, there are some renovations that may not fetch as much when you sell. If you're looking at making some of the following enhancements, it's best if you will be in the home for a long time to enjoy them. These types of specialty improvements may attract some buyers but could dissuade others who don't share your interests. For example:

  • Wine cellars: Perfect for an aficionado of fine wines, a wine cellar may not be appealing to buyers that don't know a pinot noir from a cabernet sauvignon. Requiring a lot of space and a special climate control system, be aware that while you'll enjoy having it, future buyers may not.
  • Sauna: Presenting a similar issue to the wine cellar, the sauna takes up square footage that another owner might want to use for other purposes. It also requires a lot of maintenance.
  • In-ground pool in an inclement climate: If you live in a climate where it's chilly more often than balmy, an in-ground pool could be more of a hassle than an investment. Potential buyers who like your home but don't want the upkeep of a pool may shy away from this feature.

Cover major home improvements with a home equity loan or line of credit

Plan for your renovations with a home improvement loan from Citizens Bank. Speak with a Citizens Bank Home Loan Advisor to discuss your home equity options, or begin the process for a home equity loan or line of credit today.


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