A home equity loan isn’t just a way to get quick cash, but it can actually prove to be a strategic decision in boosting your home’s value if used the right way.
While many homeowners think of it for debt consolidation or emergency expenses, using a home equity loan for home upgrades is like paying it off in value. You can use the funds to turn your house into a more comfortable place and a more valuable one on the market.
So, when you’re using your home’s equity, use it to boost the equity even more. Here’s how.
What Is a Home Equity Loan?
A home equity loan allows you to borrow a lump sum amount based on the value of your home minus what you still owe on your mortgage. For this reason, it’s often referred to as a second mortgage, which usually comes with fixed interest rates and set repayment terms.
Some lenders, however, offer flexible repayment terms so you can choose what works best for you. AmeriSave, for example, lets you choose a plan and interest rate according to your preferences and budget.
Why Use a Home Equity Loan for Renovations?
The answer to this is simple. Because it’s how you can get the most out of the funds you receive.
When you reinvest your equity into your back, you’re potentially increasing both your daily quality of life and your home’s resale value. And it’s especially smart if you’re already planning to sell the house in a few years, or just want your home to feel new again without moving to a different one.
Other reasons for choosing a home equity loan over other loan options include:
- Lower interest rates
- Potential tax deductions
- More flexibility
- Longer terms
How It Can Help You Build Value
Here are some ways you can use the loan to increase your home’s value:
Remodel Your Kitchen
Upgrading your kitchen is one of the most common and popular ways to add value to your home. You can go for modern cabinets, new countertops, updated appliances, and better lighting. Even a small kitchen remodel can offer a significant return on investment, depending on your location.
Upgrade Your Bathroom
A boring and outdated bathroom not only affects the aesthetics but also the overall appeal of your home. You can use the loan to refresh it with new tiles, vanities, fixtures, and even add better features. People love modern bathrooms, and your family will enjoy them too.
Energy-Efficient Improvements
You can install solar panels, energy-saving windows, and other energy-efficient systems in your home. These upgrades lower utility costs and make your home more valuable and attractive – especially to eco-conscious buyers.
Don’t Forget About Curb Appeal
Exterior upgrades often go overlooked but can make a huge different. Use part of your loan to improve landscaping, install a new front door, or add outdoor lighting. Your home’s first impression is made by the exterior, so focus on it if you’re planning to sell.
Also, make sure that your grass is trimmed and clean, and the outside of your home is well-painted.