Home improvement is the term used to describe renovations and remodeling projects that enhance the appearance or functionality of an existing property. It can involve anything from a small project like painting or changing the color of a room to a large undertaking, such as adding a deck.
The home improvement industry has grown stronger than many other industries in recent years, thanks to a variety of factors. For starters, aging homeowners are spending more than ever on renovating their homes. They’re also taking advantage of the fact that real estate prices are rising, which means more available equity to use for home improvements.
According to a recent report by Harvard Joint Center for Housing Studies, spending on home improvement has increased by 50 percent since 2010 and older homeowners are responsible for the vast majority of that growth.
Before you start a home improvement project, it’s important to consider your personal budget. You should also carefully weigh the impact of your project on your resale value and the amount of cash you’ll be able to recoup if you sell.
If you’re planning to make major home repairs, such as replacing a roof or installing new windows, it might be best to work with a licensed general contractor to help ensure the job gets done right and that you won’t end up paying more in the long run. Be sure to get references from other customers, and check that the contractor has all the necessary licensing in your state.
It’s important to establish a payment schedule with the contractor, and be certain to stick to it. Often, contractors will ask you to pay an initial deposit to hold the project in place and then ask for subsequent payments until all the work is complete. This is a common practice and can save you money down the road.
You can use a home equity line of credit to finance home improvements, as well. This type of loan allows you to borrow against your home’s equity, and you can usually spend the money however you want, so long as it doesn’t exceed 85% of your home’s value.
A home equity line of credit can be an excellent choice for larger home projects that require a significant amount of funding. You can use the line of credit for a single project or to cover multiple renovations. It’s a good idea to research the interest rates and fees associated with different home improvement financing options before making a decision, so you know which one will be best for your specific needs.
Using a credit card for a home improvement project is a popular option because they typically offer an introductory 0% APR period for a year or more. Some credit cards even give you the option of using cashback rewards or other incentives to pay off your balance.
If you have a high credit score, a home equity line of credit can be an effective way to borrow for a renovation. You can then repay the loan over a period of 5-30 years with fixed monthly payments.