4 Ways to Use Your Home’s Equity to Improve Your Home

A Home Equity Line of Credit (HELOC) is a great way to finance home improvements at a lower rate than what you might receive using the average credit card. The best part about using a HELOC is that you’re literally using the value of your home to increase its value.

Let’s assume your home is worth $275,000 but you only owe $175,000 on the mortgage. That means that you have $100,000 in equity. Borrowing against that equity allows you to receive a loan at a low interest rate. That’s because your home acts as collateral — something that you own, that can be used to secure the loan.
What are some of the best improvements you can make to increase the value of your home?

(Keep in mind that all of these improvements show the best return if you’re making primarily cosmetic changes vs. major changes like tearing down walls or relocating plumbing).

1. Kitchen remodeling

image of kitchen remodel


The most recommended updates to show a return on your investment:

1. New appliances. If you currently have mismatched appliances that are 20 years old, it’s time to replace them. Not only are new appliances more energy efficient, if you are putting your house on the market buyers expect a matching suite of appliances.

2. Updated cabinets. If cabinets are falling apart, tear them out. If it’s only the finish that’s outdated, sand and re-stain them or paint them using a modern color palette.

3. Countertops. Go with stone if your home and neighborhood support that expense. Go with less pricey and lower-maintenance options otherwise.


2. Bathroom remodeling



Bathroom remodels also provide a relatively good return on investment, with 64 percent of a midrange remodel’s cost recouped, according to Remodeling’s 2020 Cost vs. Value report.

Your return on investment for a bathroom makeover will depend partially on the quality of the materials partly on the quality of the workmanship. Unless you have considerable skill, leave the remodeling to a professional and skip the bathroom as a DIY project.

Focus on these improvements:

New fixtures. Banish the blue toilet. Pay attention to the sink and vanity with an eye toward storage
Make a splash with tile. You can’t go wrong with white subway tile; it’s a classic. In a small bath you can also splurge a little and gain tremendous value for the investment.


3. Building a deck

Image of Deck


Whether you’re building or repairing your deck, this asset is a tried-and-true way to add value to your home.
Decks usually have close to a dollar-for-dollar return on the investment – around 80% give or take a few percentage points. It’s one of the best home improvements you can make to drive up your home’s value.



4. Enhancing Curb Appeal



Curb appeal not only adds charm to your home it also adds value to your property. When you consider the best home improvements you can make, don’t overlook the outside of your home. A beautiful exterior sets the stage for what’s inside.

Whether your exterior improvements are from the top down or the bottom up, these upgrades will add value to your property:

1. New siding, windows, or roof for the house. If the house needs more than a new coat of paint, replace the siding. Make sure windows are energy efficient.

2. Replacing your garage door. This action can practically pay for itself, in some instances a new door can not only provide an instant facelift; but they can be one of the more modest home improvement expenses.

3. Landscaping can quickly pay for itself. Sod, plantings, and the all-important deck for outdoor living space all add to your property value.




If you’re considering home improvements, it’s always a good idea to speak with someone who has gone through the process before— This can be a simple way to avoid costly mistakes. If you would like to learn more about a Home Equity Line of Credit and if this option is right for you, contact us today.