Home improvement is big business. Television schedules are packed to the brim with shows like Fixer Upper and This Old House, and homeowners everywhere want to know how they can improve their own houses. But before you pick up a sledgehammer, take some time to plan. A well-planned renovation is both less stressful and cheaper than a haphazard one. That’s why it’s essential to get the non-negotiable details hammered out ahead of time, whether you’re tackling a minor cosmetic upgrade or a major construction project.
It’s also a good idea to choose upgrades that will increase your home’s value. Sparkling bathrooms are always a safe bet, as are kitchen remodels and basement renovations that add living space. But not all home improvements are created equal: some actually decrease a property’s value. For example, converting a garage into living space doesn’t boost your house’s resale value, because most buyers want to keep the garage as is.
A great way to pay for the renovations you want is with a home equity loan. This allows you to use a portion of the equity you’ve built up in your house as collateral for a lump sum that you then repay over 5-30 years, with fixed monthly payments. This can be a smart alternative to taking out a traditional second mortgage for costly expenses such as home renovations, debt consolidation and medical bills. But it’s important to understand how these loans work before using them, as they carry the same risks as a conventional mortgage.