How to Finance Home Improvement Projects
Home improvement projects can increase the value of your home. While living room and dining room upgrades can increase your home’s value by about 1% to 3%, exterior improvements can add another 2% to 5% to its value. Homeowners should check the contractor’s insurance and references before hiring him or her to improve their house. They can also use home improvement aggregators, which bundle home improvement service offers. These aggregators act as middlemen between home service providers and potential buyers.
Home improvement spending has grown rapidly in recent years. In the United States, the market is estimated to reach almost 600 billion dollars by 2025. That is more than double the value of the industry in 2008. Other countries, like Canada, are seeing significant growth in home improvement spending. The growth in the industry is due to many reasons.
The continued growth of the home improvement industry is a boon to both homeowners and professionals. Despite the low interest rates, the continued growth of home improvement projects is a signal that consumers are willing to pay for them. The latest survey shows that 56 percent of respondents plan to hire a professional for some or all of their projects in 2021. Meanwhile, 44 percent of respondents said they’d like to tackle more complicated projects in the future.
Another option for financing your home improvement project is a home equity loan. This type of loan is an installment loan, usually for five to 30 years. It acts as a second mortgage and can cover the costs of large-scale projects. However, the loan amount should not exceed 85% of your home’s equity. Home equity loans may also have origination fees, closing costs, and appraisal fees.