Have you ever dreamt of having an extra bedroom, or a bigger, more modern kitchen, but couldn’t afford a larger home?
This is the situation that millions of Americans find themselves in every year – but there is a solution. With a renovation loan you can afford to transform your house into your ideal home.
Remodeling might be able to provide you with your dream home, but is it financially viable? Let’s take a look at three reasons why this can be a good choice:
The improvements you make to your home increase its value, and you can recoup this money should you choose to sell your home later. The amount of value you add depends on the improvements you’re making, as well as factors such as the area you live in and the housing market there.
You can estimate the value you’ll receive by examining statistics on past projects online. For example, in 2017, homeowners with mid range homes received a high return for remodeling projects such as:
Of course, these numbers only reflect the amount added to the market value of your home. The value to you and your family personally may be much higher, and improvements that dramatically enhance your day-to-day life will give an ongoing return by making life easier and more enjoyable for your family.
If your mortgage has a high interest rate, refinancing to a lower-rate mortgage can mean you’re spending the same amount or less on your monthly payments even after taking money out. Today’s favorable market conditions mean it is often possible to improve your home without increasing your monthly payments – your payments may even go down.
Additionally, if your monthly income has improved since you took out your mortgage, you may instead choose to shorten your payback time by increasing your monthly payments. This change alone could save you tens of thousands of dollars in the long-run.
If you are a taxpayer and use some of your refinancing money to improve your home, you may be able to deduct some of the costs. This saving is not possible if you pay for your remodel using another method, such as by financing it on a credit card. Find out more on the IRS website and consult your tax advisor for more information.