When summer arrives, homeowners tend to start thinking about home improvements, both indoors and out. Before beginning any project, consider all your options — what really needs doing? What’s a fun “wish list” project that can add enjoyment to your home? What might increase the value of your house? And most importantly, how are you going to pay for it?
Make your home upgrades easier by doing a little homework and planning before diving in. Here are five things to consider before jumping into a summer remodeling project.
1. What needs to be done?
Is anything broken or unsightly? Did winter weather cause damage to your roof or walls? Is your plumbing acting up? Are the kitchen appliances acting up?
Try taking a walk around your house, inside and out, and make a list with two columns: “need” and “want.” Most likely, you’ll find that the needs list should be dealt with first. Anything that could cause further damage is something you don’t want to put off — though it may be an expensive fix now, it will only cost more later.
2. What's on your wish list?
Which improvement projects would make the summer perfect for you and your family? How about a fire pit, patio or hot tub? Maybe even a nice deck or privacy fencing will do the trick.
Think about the projects as those you can DIY versus the bigger jobs you'll need a contractor to accomplish.
3. What adds value?
Whether you plan to sell in a few years or decades from now, consider projects that could boost the resale value of your home. Consult a real estate agent for advice about your specific home but, in general, projects that add curb appeal or update how your home looks from the street tend to provide a good return on investment. Common improvements include re-siding your home, installing new windows or landscaping that spruces up your property.
Apart from tackling your curb appeal, kitchen or bathroom updates can be a smart investment too, especially if the style and fixtures have seen better days.
4. How will you finance it?
Once you’ve identified your top projects, consider the cost. Know your limits with DIY — doing a job poorly can often end up costing more in the long run than hiring a professional upfront. Do your research and get estimates from reputable sources and businesses.
A possible source for financing could be your home's equity. With improved home values and low interest rates, many homeowners use a home equity line of credit (HELOC) to fund updates to their homes. You'll need to understand the current value of your home and ensure that any loan obligation you undertake is manageable and within your budget.
"Many Americans have equity in their homes, so a HELOC can be a cost-effective way to fund more substantial renovation projects. It gives you the flexibility of a credit line that you can access as needed and offers more attractive interest rates than many other financing options,” says Ann Thompson, retail sales executive with Bank of America.
Although only 7% of homeowners used a HELOC to fund renovations in 2017 according to a Houzz and Bank of America study, there are advantages in doing so. A HELOC offers secured, lower-interest financing unavailable through other means, and you can use as little or as much of your available credit as you need. Tax benefits are still available for home equity funds that are used for substantial home improvements, but every homeowner should confirm their specific situation with their tax professional.
For a simple, convenient way to learn about HELOCs, just text "home equity" to 2265 26 (BANK AM) for a link to important information and the digital tools you need to apply.
5. What are your other goals and obligations?
Before beginning any project, make sure you're not taking on more debt than you can handle. Beyond home improvements, HELOCs can be used to fund large expenses like education costs, consolidate higher-interest debt or even be used as an emergency fund, but make sure to consult a financial advisor to understand how best to utilize a HELOC.
Additionally, be sure you have time to supervise or follow through on a project. You don't want to find out your big kitchen remodel will finish up the week you scheduled a family vacation.
Whether your ideal — or necessary — home projects are big or small, the available equity in your home could help you fund your renovations this summer. As long as you prioritize your projects and plan for the time and expense involved, you should be able to enjoy your home updates for years to come.