Home equity is a source of wealth that not every homeowner thinks about as a useful resource. When you get your mortgage, if you’re like most people, you only think about it in terms of liability. You owe your mortgage, which for most numbers in the hundreds of thousands of dollars, and that’s it.
The remaining portion of your mortgage is likely to be all that you think about. But the part that you’ve paid off, your home equity, is not to be underestimated. This part represents your ownership, as the paid portion of the house – and you can use it to raise funds for other expenses or investments. Enter the home equity loan. If your home needs an uplifting renovation, one that makes it a joy to live in, then trading your equity for the home renovation of your dreams could be well worth it.
What is a Home Equity Loan?
A Home Equity Loan typically comprises two parts: A mortgage on your current house and an additional line of credit that’s secured by the value of your current property. Here’s how it works: You can use the money from the equity loan to pay off any debt you have on your home, consolidate your assets or make major home repairs. The lender will allow you to borrow as much money as there is equity in your property. That means if your house is worth $250,000, but you owe $200,000 on the mortgage and other debts, the loan would be for $50,000.
Isn’t this a bad idea, though? More debt isn’t necessarily recommended. In today’s tough economy, some people have been hesitant to take out a home equity loan to perform home renovations, preferring to use it for emergencies. But if you and the rest of your household are in a good place financially, you might be glad to trade equity for an undeniably better house and one that you can sell for much more years from now.
What Are The Ways To Use A Home Equity Loan For Home Improvement?
If you are thinking about remodelling your home, this is a great time to take out a home equity loan and put that money towards the improvement of your property. How you decide to use it depends on you.
Kitchen Remodeling
Are you thinking of doing a complete kitchen remodel? You can use your home equity loan to pay for this project. You may be surprised at how much a complete kitchen remodel can cost, but a home equity loan is one of the best ways to pay for the work. When you spend tens of thousands of dollars on a remodelled kitchen, you will more than get your money back when you sell your home, thanks to a kitchen’s status as a home centerpiece.
Additions
Do you have a large family, but your home is not big enough to comfortably accommodate everyone? You could take out a home equity loan to have an addition added to your home. This can include anything from a pool house to a new sunroom. A sunroom can be the perfect place for you to escape the heat of summer or the cold of winter. Additions are great for increasing the value of your property as well as increasing its livability and functionality.
Bathroom Remodel
A bathroom remodel can be very expensive. If you want a complete renovation, you should expect to spend thousands of dollars. Thankfully, a home equity loan can make this project much more affordable. It’s one of the best ways to pay for your new bathroom. You will love how it looks and feels in your home, and you will certainly get your money back when you sell the property.
Roof Replacement
It’s not uncommon for homeowners to need to replace the roof on their homes. If you haven’t yet reached the point where you need a new roof, you might have some leaks that can be fixed quickly with full replacement. A leaky roof is not just annoying; it can be very expensive if it’s not repaired quickly. You can use your home equity loan to pay for this repair work or replacement work by a Union Kentucky roofing company. This kind of exteriors work is also a great chance to boost curb appeal and thus home value with outstanding practicality.
Garage
If you have a garage that is not attached to your home, you may want to consider having it connected. You can use your home equity loan to pay for this work. Not only is it another addition that will add value and livability to your property, but it’s also great for holding all of your tools and vehicles. It can also grant an extra space for recreation, like a pool table or dartboard.
Home equity loans can be a great way to pay for home renovations. You can use these loans to remodel your kitchen, add walls and new features, build an addition, and more. You will certainly get your money back when you sell your home if you go with an outstanding home renovator.