Using Your Home Equity To Improve the Value of Your Home
If you've built up a substantial amount of equity in your house, it may be time to remodel and add other improvements to your dwelling. Here are some ways you can use that equity to improve the value of your home.
Take Out a Home Equity Loan
The equity on your home is the value of that dwelling less the cost of the mortgage. For example, if you've been making mortgage payments for a few years, and you've pared that loan down to $60,000. Your equity is the value of your home less than the loan amount. If your home is worth $200,000, for example, your equity would be $140,000 with that $60,000 remaining loan amount.
You can take out a loan using that amount as collateral.
Get a Proper Appraisal
In order to qualify for a loan, you'll need an official appraisal of your residence. Contact a real estate agent to get an accurate estimate of your house's value. Then contact a lending institution such as FHA refinance to see if you qualify.
Make Sure You Qualify and That You Can Pay It Back
If you do decide to get a home equity loan, make sure it's a loan that you can pay back without getting in over your head financially. If you haven't made a budget, create one before applying for a home equity loan. Make sure that no more than 30% of your income goes toward paying off your debts.
Also, make sure you have a good credit score before applying for any loan. If your credit rating isn't as high as it should be, work on building your rating before applying. Pay your bills on time and reduce the amount of credit card debt you owe.
Ways You Can Improve Your Home
Once you qualify for that loan, you can use the money to improve the value of your home in a number of ways.
Remodel Your Kitchen
Remodeling your kitchen is great for updating your home and improving its value. People tend to spend more time in their kitchens than in any other place in their homes. Invest in quartz countertops and ceramic flooring. Replace the cabinets if they're getting old and battered. An attractive and versatile kitchen will improve your home's resale value.
Lower Your Energy Costs
By doing a little work on your home, you can lower the energy costs and save yourself a lot of money. Get your attic insulated so air doesn't escape through the roof. Replace all the windows in your home with some that are more energy efficient. Place weather-stripping around all the entrances to keep the outside air out.
Build a Backyard Deck
Building a backyard deck not only improves your home but also gives you additional living space. Add a roof to your deck to provide shade in the summer and protection from the rain. Furnish your deck with beautiful all-weather furniture to make it a comfortable and inviting space.
Add planters to your deck and fill them with flowers that bloom all summer. Your deck will be a beautiful escape from the nine-to-five grind and add value to your home.
Add a Swimming Pool
Adding an inground swimming pool is another excellent way to improve your house's value. If you choose to add a swimming pool, be sure and add a fence around your backyard to keep children in the neighborhood from straying into your yard and in your pool. You'll also have to hire a maintenance company to keep the chemicals at the right level so that the water stays clean.
Add a Pond
Adding a pond to your backyard is another way to improve the value of your home. Adding hard cloth in addition to a liner to the bottom of your pond will ensure that moles and other burrowing animals don't find their way in. You'll know if your pond has been compromised when the water keeps draining out.
Install a water pump and then add fish and aquatic plants for a beautiful pond that's full of life and beauty. Use a pool skimmer or pond rake to keep your pond clean and the water clear.
Repaint Your Home
Repainting your home both on the inside and out is another way to beautify your dwelling and add to the value of your home. When choosing an exterior color for your dwelling, think about the style of your house. If it's traditional in style, then white or cream is the best color whereas a more modern home does well with colors such as gray or black.
Also, consider the other homes in the neighborhood. If your neighborhood is modern, paint your house with a color that helps it stand out. If you live in a more rural area, find a color that helps your home blend in with the natural surroundings.
If you're not sure what color to choose for the interior of your home, buy a color wheel to give you ideas. By turning the wheel, you can see what colors work well together. Or find a print fabric that you love and then look for a paint color that matches or even enhances the fabric.
If the thought of painting your home is overwhelming, make it easy on yourself by hiring a professional painter.
Improve Your Curb Appeal
Another way to improve the value of your home is to add to your home's curb appeal. The first impression your house gives is the most crucial, not only to you but also to your neighbors. Have sidewalks installed in the front yard or replace those walks if the sidewalks are cracked.
Add lighting to your front yard not only for added beauty but for safety as well. You can string lights in the trees in your front yard and also add embedding lights by the sidewalk to help you find your way to the front door on those nights you get back late.
If you have equity built up in your home, taking out a home equity loan could be an excellent investment for improving your house's value.