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Maximize Your Home Value and Potential

An icon of a two-story home with a tall tree to the right, and pink emphasis lines

Your home is likely the most expensive purchase you’ll make in your life. Many know that it takes years of mortgage payments to build equity. If you’re wondering what to do with the equity in your home, you can repurpose it to unleash your home’s potential. Increasing the value of your home is a wise investment, whether you plan to stay in your home for years or sell in the next few months. Let’s make that Pinterest board a reality.

Why You Need a HELOC

Remodeling your home takes time and money. You may have easy access to more money than you realize. By opening a Home Equity loan or HELOC with Alltru, you can borrow from the equity of your home to fund your home improvement projects. Here are some reasons why you should open a HELOC to pay for your home improvement projects.

Put your home equity to use. The equity of your home is calculated by subtracting your mortgage balance from the market value of your home. If you have paid off your home already, you have full equity of your home. Often, HELOCs can be approved for 90% of the home’s value. This means that if you have $300,000 of your home’s equity, then you can borrow up to $270,000 through a HELOC.

Stay in control. With a HELOC loan, you only borrow the money you need. Plus, you borrow as you go. You can use the funds at your own pace during the loan term, which can last for years. If you need a larger amount of money all at once, a Home Equity loan is another option.

Get a low interest rate. HELOCs often have lower interest rates than credit cards, personal loans, or financing options from other companies. The money that you save in interest can be used to make higher quality upgrades to your home, or they can be used to settle the balance of the HELOC easier.

Take advantage of tax benefits. The interest you pay for your HELOC may be tax deductible. These funds must be used on home projects to be deductible. If you aren’t sure whether or not your project will qualify, talk to a tax professional so you know what to expect when it’s time to file your tax return in the spring.

Increase your home’s value. As implied, you can use the funds from your Home Equity loan or HELOC to invest in your home. Many home projects can increase the value of your home. If you decide to sell your home later, you can list it at a higher price since it’ll be worth more. This will create a great return on investment for the future you to enjoy.

Best Home Improvement Projects

If you plan on selling your home soon, there are several different projects that can help increase your home’s value. While these might not all be ideal for you to live with, this will be short lived since you will be selling your house soon anyway. Here’s a list of great projects to increase your home value.

Improve your curb appeal. Many people who drive by a “For Sale” sign in your yard may quickly overlook it if your curb appeal is lacking. Keep your yard well-maintained with easy-to-manage landscaping. Enhance your outdoor space by adding eye-catching elements like stone walkways and vibrant flowering plants, which can create visual interest and draw potential buyers in from the street.

Update your kitchen. People spend a significant amount of time in their kitchens. Having an updated kitchen will appeal to many home buyers. Even if you just update your appliances, that’s one less project the future homeowners must tackle themselves, making the home move-in ready. Plus, you can usually increase the sale price of your home by installing new appliances too.

Revamp your bathroom. As a homebuyer, loving everything about a house besides the bathroom can be a dealbreaker. If you can’t afford to update several rooms before listing your house for sale, tackle the bathroom first. Update the tub or shower’s tiling and caulking. Install a trendy mirror and paint the walls a peaceful color. Bathroom updates can be relatively inexpensive to complete too.

Paint your walls. Giving your walls a fresh coat of paint can hide any chips or blemishes that happened over time. You might need to patch a few holes from nails or screws before you paint, but it’s easy to do so yourself with a trip to Home Depot and a YouTube tutorial. Give your walls a neutral color that will appeal to homebuyers.

Replace your floors. If you have pets, it’s a wise idea to replace the flooring in your house. Pet dander and waste could have built up in your carpet over time. Old, worn, and crusty floors are unappealing and can cause you to miss out on potential home buyers. Choose a neutral color that matches your walls to make the house aesthetic more cohesive.

How to Tackle Home Projects

Whether you want to live in your home for several more years or want to sell in the near future, the idea of completing home projects can be intimidating. This is especially true if you haven’t done any before. What if you ruin a wall or two or an entire room? Here are some tips to follow as you start to tackle projects around the house.

Renovate one room at a time. While the list of potential projects may be long, it’s important to tackle one at a time. Start with one room in your home and complete one project at a time in that room. Successfully starting and finishing a project can be motivating for you to continue with other projects.

Don’t ignore the small improvements. Your list of projects might include several small projects and a few large projects. While it can be tempting to complete just the big projects, the small ones still have value. If you plan on selling your home too, each of these small projects can make your home more appealing to homebuyers, especially if these projects involve fixing something broken or damaged.

Consider the exterior too. Your home should be a serene, cozy hideaway from the outside world. The exterior of your home should reflect that too. Freshen up your curb appeal to make it attractive from the outside in. If your siding is moldy, your roof is missing shingles, or your front door needs to be painted, others will think that the interior may have the same vibe.

Should You Renovate or Sell?          

As you live in a home over the years, you may start to notice discomfort that you didn’t experience at the beginning. Things like outdated walls, a small yard, or a lack of a tub in your bathroom might leave you feeling ready for a change. So, how do you determine whether it’s best to renovate or sell your home to look for a new one that better meets your needs? What if you can’t find your dream home in your ideal neighborhood? If you’re pondering whether to renovate or sell, follow these steps to make the most informed decision for your situation.

Write a list of projects. Make a list of the aspects of your home that feel unappealing, and outline the projects needed to address those issues—whether they’re practical fixes or ideal upgrades that may not be immediately necessary. Prioritize these projects in order of importance, from most urgent to least. You deserve to feel happy and comfortable in your home for years to come, and this will help you identify ways to keep your space up to your standards. Even if some of these projects seem unrealistic at the moment, don’t hesitate to include them—such as adding an extra bedroom or reducing the number of stairs.

Describe your ideal, new-to-you home. Now that you know what you want to improve in your current home, write out what you want in a new or new-to-you home. Moving can be a costly hassle. By creating a list of needs and wants, you can help determine if the move is worth the trouble.

Calculate the value of your home. Free home estimator tools like this one on Zillow can give you an idea of how much your home is currently worth. This estimate is before tackling your list of projects. If you’d like a more accurate and detailed value, you can get an appraisal done. This can help you determine if completing your projects is worth the effort – whether it be to increase your home’s value to sell it or to stay in your home long-term.

Create a budget. Figure out how much money you can spend on your list of home projects. Part of your budgeting process should include deciding whether to pay for the projects out of pocket up front, or whether you want to use a Home Equity loan or HELOC to fund your projects. In addition, you should determine how much money you are willing to spend on buying a different house. If you can, time your buying and selling so you sell your house first and can use the money from the sale toward the down payment of your new house.

Research the cost of your projects. Take your list of projects and determine how much it will cost to complete them and make your list smaller. If you can complete projects without hiring a professional, this can help save you a significant amount of money. If you’re more comfortable with a professional completing the work, get quotes for how much these projects will cost. As you get quotes or calculate the cost of completing projects yourself, leave a little wiggle room in case an unexpected expense arises in the process. This will keep you from overspending.

Plan your projects. As you begin gathering quotes and estimating the costs of various projects, take note of how many upgrades you can realistically complete before you run out of funds. Some of these improvements could also help increase the value of your home. To get a better idea of the potential return on investment, consider consulting a contractor, real estate agent, or appraiser, who can provide insight into the value these upgrades may add. At this stage, it’s best not to commit to any specific upgrades just yet.

Evaluate other houses to buy. Now it’s time to put your original list of needs and wants for a new-to-you home to use. Browse houses that are on the market and in your budget. Which houses meet your criteria? Are these homes in convenient neighborhoods? What needs and wants aren’t met in these other houses? For each house you want to seriously consider, answer these questions.

Make your decision. Now you have all the steps you need to make an informed decision of whether you can improve your home to your liking or whether you should buy a different one instead. You may decide to make upgrades to increase the selling price and buy a new home. Choose whichever option works best for you.

Conclusion

As a homeowner, it’s important to love your home from the inside out. After you build some equity in your home, you can repurpose those funds to make upgrades to your home to keep loving it for years. If you don’t know where to start, painting your walls and updating appliances add value to your home for a relatively low cost. In addition, a list of projects can be tackled one room at a time to create the motivation you need to move forward. If you still aren’t happy with your home, consider increasing its value by making updates before you sell. Whatever you decide, Alltru is here to get you a Home Equity loan if you want to stay in your current home or a mortgage if you want to move.

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