Building Equity Through Home Improvements

Did you know you can turn your home into a money making "machine"?  Your home is a lot like any other type of investment- over time, if conditions are right, and you take care of your home by keeping up with home improvements and maintenance- your home can build equity and actually make you money above what you've been paying for your mortgage each month!

The Little Things

 It's amazing how much value certain aspects of a home add to the home equity.  Keeping up with the maintenance of your home can go a long way in helping to build equity while making your mortgage payments (or even after you've paid off your home mortgage).  Leaky faucets, broken floor tiles, and holes in the walls will not only bring the overall appearance of your home down, but will also affect the amount of value your home maintains.  When small issues like these occur in your home, you need to take initiative and have them fixed immediately, as it will pay off in the long run.  The few dollars you spend to replace a washer on your leaking faucet can save hundreds, if not thousands- on the total value of your home!

Home Equity Loans

As you make payments on your home mortgage, you are establishing equity into your home.  After a few years, you will be able to take out a home equity loan, the amount of the loan determined by the amount of equity you've built into your home.  Home equity loan rates are dependent upon the current economic conditions, as well as your personal credit history, your mortgage payment history, and your ability to repay the home equity loan.

There are many providers of home equity loans.  A good place to start if you are interested in obtaining a home equity loan (whether it's to consolidate other debts, purchase a new car, or make improvements to your home) is with your existing mortgage lender.  They may be able to give you the best rates as a preferred customer, so it's a good idea to start with your particular mortgage lender before you shop around to compare home equity loan rates and terms.

Even if you have had some financial difficulty in the past, and have less than perfect credit, you may be able to obtain equity loans with bad credit.  There are certain lenders that specialize in loans for bad credit scores, and you may be surprised that you can obtain the funding.  Your other option would be to focus on repairing your credit for a few years before looking to get a home equity loan.

Home Improvement adds Home Equity

Remodeling certain rooms of your home is often a way to build immediate equity into you rhome.  Bathrooms and kitchens are known for increasing the value of your home- particularly if you remodel them to add more space, more modern appliances and fixtures, and improve their appearance as well as functionality.  Granite counter tops in kitchens, and stainless steel appliances can seem costly to install- but typically they will add two to four times their cost in value to your home.  You can check with a real estate agent before making major remodel plans to see how much estimated home equity will result from the work.