Using Home Equity for Home Improvement Projects

By Karen Lawson
Local Lender Columnist
Oct 26, 2007
You're considering home improvement projects. Although home improvements may be a way of life for some homeowners, who move from one weekend project to the next, major projects require advance planning and financing. Home equity can be a good source of funding for remodeling and updating your home. Knowing what you want to do and why can help you stay focused and keep costs in line. Researching major projects in advance can help you choose home improvements that can potentially add the most value to your home.

Home Improvements: Know Your Goals

You've probably seen home improvement themed TV shows. Flipping, staging, updating. What are your reasons for improving your home? Do you plan to keep your home, or are do you want to maximize your home's appeal to potential buyers? If you plan to sell, knowing current market trends can help you get the most out of your investment in home improvements. Local real estate firms can assist in identifying the "must haves" that Connecticut buyers want.

Home Equity Lines of Credit Provide Flexible Financing Options

A home equity line of credit (HELOC) can provide financing for home improvement projects. You use funds from your HELOC as required, which can help you avoid borrowing and paying interest on more funds than you end up needing. It's important to plan home improvement projects carefully, and be realistic about what you can afford to spend. HELOC loans are a type of mortgage loan, and are secured by your home. If property values suddenly decline, or if you face unexpected cost overruns, this can negatively impact your home equity. Using a HELOC for home improvement can add to your home's value and your enjoyment of your home.

About the Author
Karen Lawson is a freelance writer with more than fifteen years of experience in mortgage banking. She holds a Master's degree in English from the University of Nevada, Reno.