How to Pay For Home Improvement Without Depleting Your Savings
Home improvement is the process of renovating or remodeling an existing building, usually for a variety of reasons. These can include personal preference and comfort, maintenance or repair work, making a home bigger by adding rooms/spaces, as a means of saving energy, and to improve safety.
The most recent American Housing Survey estimates that in the next two years, homeowners will spend more than half a trillion dollars on home improvement projects. This is despite an expected economic recession, a trend that will likely continue to force consumers to cut back on discretionary spending and exhaust their emergency savings.
In the meantime, the market is booming for contractors and tradespeople. The demand for home improvement services is growing as consumers seek ways to make their homes more comfortable and attractive.
Experts are forecasting that projects that will increase a home’s energy efficiency will be among the most popular in 2023. These updates reduce a home’s utility bills, which are already on the rise due to high inflation.
Another key project will be renovations that improve a home’s value, according to Zillow. About 30% of recent home sellers say that more repairs or minor cosmetic updates would have helped them sell their home for a higher price.
While home improvements can be a costly undertaking, it’s possible to find creative ways to pay for them without depleting your own savings. For example, you can opt for a home equity line of credit (HELOC) that allows you to borrow up to 85% of the value of your property – minus the balance on your outstanding mortgage. You’ll need to be prepared to put in a longer underwriting process than with a traditional personal loan, but it could be the ideal solution for sprucing up your house.