Home Improvements Made Easy: Your Complete Guide to Using Home Improvement Loans the Right Way

• How to Plan a Killer Kitchen
• Smaller Projects that Make a Big Impact
• DIY Projects Make an Impact
• Boost Your Curb Appeal
• Floor Plan Adjustments that Make Your Wallet Happy
• Mistakes to Avoid With Home Improvement Projects
• Financing Options for Home Improvement Projects

If you want to increase the value of your home you might want to consider making some smart upgrades. These are improvements to your home that allow you to make somewhat minor changes that can offer major financial impacts.

Some of the best home improvements for resale involve the kitchen, landscaping for improved curb appeal and those small DIY projects that can make such a big difference in the aesthetic of your home.

Some of the best areas to focus your attention may seem expensive. Although saving up for a specific home improvement project is the best way to pay for the upgrade, it isn’t always possible.

Even though there are many financing options available to help pay for dream home improvements or renovations such as Home Improvement Loans, Home Renovation Loans, Home Equity Loans, and Home Equity Lines of Credit, you will always want to be sure your project will pay you back in the long run.

Learn more about how using Home Improvement Loans for targeted home improvements can increase the value of your home.

Are you considering purchasing a home in need of major renovations? For information on financing a fixer upper, review our blog "What is a Home Renovation Loan." 

Home Improvement Loans Can Pay For A Killer Kitchen

Families flock to the kitchen when they first enter a home. It is the center point for parties and gatherings, important memories and holiday traditions. Start here with any upgrades for the biggest bang for your home renovation budget.

Real Simple reports that you can get back up to 77% of the return on your investment in kitchen upgrades. However, the key here is to focus on positively impacting the worth of your home by purchasing materials that improve the real value of the space. Always be careful not to overspend if you are thinking of moving anytime within the next three to five years.

The best materials to use when upgrading your kitchen are the ones that hold up the longest and offer the best functionality. Marble, granite, stainless steel, cast iron, and cherry wood are all desirable materials for kitchen upgrades as noted by HGTV. These are the materials that homebuyers are searching for in the kitchen space when they buy a new home.

In addition, you need a consistent design aesthetic or style for the kitchen. This creates a more desirable and sellable space.

Evaluate your current style and decide what you want your final kitchen design to reflect. For instance, you might be interested in traditional American, but then you also might love the look of mid-century modern. Choose one style and stick with it. Once you nail this idea for your theme, you can start with those accessories.

You can even begin your kitchen transformation with a small upgrade like replacing accessories and fixtures that are easily interchanged. Reader’s Digest points out how you want to keep all of your fixtures, tile work, drawer pull handles, knobs, and shiplap in the same style.

Changing out your kitchen faucet is a DIY project you can accomplish for an average cost of $150 to $350. Also less expensive and just as impactful, cabinet handles, drawer pull knobs, light plate covers, and light fixtures can also transform the overall look and feel of a kitchen and work toward increasing your home’s value.

When considering a kitchen renovation, keep in mind that it can cost between $12,800 - $21,200 on average to complete. This breaks down to approximately $100 - $250 per square foot. Although this is the average, projects that focus on minor cosmetic updates can be less expensive ($12,000) while projects aimed at an upscale complete remodel can be more costly (up to $126,000). The final price depends on the materials you chose, new features and layout changes you plan to include, the square footage of your space, and the contractor you select. As an example, moving a sink or window to a new location in the kitchen can add $1,500 - $4,500 per item. Link for graphics to create a chart of kitchen remodel cost breakdown.

If you decide to use money from your Home Improvement Loan on renovating your kitchen, you can rest easy knowing that your home’s value should definitely increase.

For information on financing your large home improvement project with a HELOC, review our blog "5 Pros and Cons of Using a HELOC for Home Improvements." 

Home Improvement Loans Can Cover Smaller Projects that Still Make a BIG Impact

Still in the kitchen space, if you want a home improvement project that offers a big impact on your home’s value, go all out with new kitchen appliances. However, think beyond the oven or the refrigerator. A warming drawer is a gourmet chef’s secret and now homeowners are adding this handy device to their upgrade list.

You can also consider upgrading the sink in your kitchen. This is often one of the hardest working areas of the space, yet most homeowners overlook the value of adding a new sink. HGTV explains that changing the sink is a bigger job than most people realize. Make sure to hire a professional to ensure the sink is installed into the countertop correctly.

Moving out of the kitchen, consider the possibilities of transforming a new part of your home entirely. If you have a spare room, such as a nursery or extra guest room, you can repurpose that room or knock down walls to create a new, more open-plan daily living space.

Using your Home Improvement Loan to upgrade your decking is another great option for increasing your home’s value. Whether you have an existing exterior deck, or you want to build a deck from the ground up, this is a great value-added feature to most homes. The goal when constructing a deck is to focus on the finished look and overall functionality. How will you use the deck space, most of the time? Where does the sun hit the space throughout the day? Consider the color of the deck in reference to the rest of the house.

Your end goal should be that any new addition to the exterior should go together with the rest of your aesthetic and improve the overall architectural design of your home.

For information on financing your home improvement projects, review our blog "7 Best Home Improvement Financing Options You Should Consider." 

DIY Projects That Still Make a Splash Are Also Covered

When you have a free weekend and want to upgrade your space, time is usually of the essence. Stay smart and go small with a simple upgrade that offers moderate value to your space.

One of the easiest ways to do this is with a mural made of wallpaper or vinyl wall decals. Reader’s Digest says that you realistically want to avoid the wallpaper, but adding some tasteful wallpaper on an accent wall or creative lettering to a breakfast room can have a very nice effect overall.

Another DIY project that would be well worth your attention is your attic. If you did finance this project with a Home Improvement Loan, Home Equity Loan or HELOC Home Equity Line of Credit, you can be certain it would pay off and increase your home’s value! For your attic upgrade, you can get about 94% of your investment back. HGTV points out some interesting facts. Homeowners in the Midwest are the least successful with attic upgrades at only 82% of a return on their investment. Meanwhile, homeowners over in the Western states are able to get the best rate at 105%.

If you are trying to repurpose a room, why not create a family room with a simple DIY project? Try transforming a sunroom into a family room. HGTV notes sunrooms are only value-added spaces for high-priced homes. Furthermore, you can only count the square footage value of a sunroom for your total property space for all four seasons if you can use the room during those months. If you have an unused sunroom, replace the windows with smaller sized framing, add a closed ceiling if necessary, and upgrade the furniture. Then you will be able to get the full value of this room all year long along with having added living space you can enjoy year-round!

For an existing family room, den, or living room, you could upgrade the space. However, before you finance your project with a Home Improvement Loan, know you will only receive about 66% of the return on your investment according to HGTV. A better option is to restage your existing furniture to make an upgrade to the space. Remove any cluttering items, follow a design plan, and start with the larger items like the sofa and armchair. From there, strategically select accessories that will best suit the theme of the space.

Using Home Improvement Loans to Boost Your Curb Appeal is a Smart Decision

Stepping outside of the home, you come to landscaping and overall curb appeal. The first impression of your home is the exterior. What does your curb appeal say about your home, and what do you want it to say instead?

This is where new siding, paint, or decking can perform a miracle on an otherwise boring or outdated house. Want to know the best way to spend your Home Improvement Loan money? Real Simple says painting your house is the number one best way to increase the value of your home. A typical exterior paint job for a house costs at least $5,000. Yet the ability to transform the total look of a home for that price is worth it in terms of improving value.

When you upgrade your deck, you are able to get back 85% of your costs when you resell the home. Real Simple notes that you want to use wooden decks to get the most out of this reinvestment reward. Other types of decking including composite and concrete are not as valuable.

When new windows show up on your home repair to-do list, keep in mind this update can bring you a good return on your investment, at an estimated 81%. When you purchase new windows, look into energy credits and rebates. You might be able to save even more money when it is time to pay your taxes, just by upgrading your windows.

Then we come to the biggest impact you can have on curb appeal—the actual curb. HGTV states you will get on average 100% of the return on your investment with landscape upgrades.

When you begin planning your landscaping design, look for big-ticket items like trees and shrubs. If you want to buy trees including fruit, flowering, and evergreen varieties, check out the Arbor Day Foundation. You can get 10 trees for an annual membership fee of $10. The trees are shipped ready to plant in the right season and come with a guarantee.

Focusing On Floor Plan Adjustments Will Make Your Wallet Happy

According to Forbes, when your home improvement project includes modifying your floor plan, you can increase the value of your home significantly. This is possible through new construction of additional square footage, and with improvements to usability and flow of an existing floor plan. Here is where knocking down a wall or two could serve you well. As noted with the sunroom, certain areas of your home are not included in the total value of the space.

While bigger homes have more value simply in square footage, upgraded rooms with more open space will also increase the overall value of your home. You can also gain more value by upgrading a room to a high-value space, such as an office, nursery, or master bathroom with an expanded closet.

Check out comparable homes for sale in your neighborhood. Identify the average number of bedrooms and baths that these homes have. Then review the home price and how aggressive the market is for that floor plan and/or total square footage. For example, in one neighborhood, more homes may have three bedrooms compared to two bedrooms to accommodate the number of young families moving into the area.

Make sure you think about your target homebuyer and what type of floor plan adjustments they could benefit from.

Another example would be if you are selling a home in a community with a greater percentage of senior residents. You would want to have a floor plan adjustment to accommodate wheelchair access and home health aid equipment. By having an idea of where you want your floor plan to go in the final design, you can create a design adjustment that is economical while also adding value to your property and home.

For information on how to create a budget for your upcoming home improvement project, review our blog "Dollars and Sense: How to Create A Home Renovation Budget." 

Here’s How Not To Spend Your Home Improvement Loan Money

Now we come to home improvement mistakes that we all hope to avoid when your goal is to increase the value of your home. You might be tempted to start with the largest ticket items in your home when you are making home renovations.

For example, you may want to upgrade your water heater to a tankless water heater that is more energy-efficient. You would be able to reduce your home energy costs, and you may benefit from energy rebates.

Although your home improvement loan can cover items in need of repairs such as a new water heater, roof, upgraded air conditioning, or plumbing fixes, the reality is buyers consider these upgrades as a requirement for the house to properly function. Reader’s Digest explains these are considered necessities to the basic operation of any home. If you do not have a hot water heater, then that would be a red flag in terms of your home’s value. But simply upgrading to a newer model may not get you the return on the investment you are hoping for.

The next big mistake homeowners make when trying to figure out the best home improvements for resale is getting a swimming pool.

Let's say your family really wants to get a swimming pool for the backyard. Your options of above-ground pool or in-ground pool come with more than just an initial price tag. Home pools are time-consuming and costly to maintain with chemical shock treatments and regular cleaning.

In addition, you have the cost of the water itself, which can be a major problem in cities that are in drought-prone regions. Most critically, you need to understand that you will not be able to get the investment back on a pool. While getting a swimming pool is a great choice for some families, make sure you are not expecting to make money from the time and cost you sink into this addition, as it is truly a luxury item.

The final yet biggest nail in the home improvement coffin is overdoing it.

There comes a time when you may need to accept the fact that you are no longer able to increase the value of your home. If your house is out-pricing the other homes in your neighborhood, you may not be able to gain the full value when you sell the home as explained by Reader’s Digest. These lower-valued homes bring down the overall property value in the area and can impact the price you can get for your nicer property simply due to proximity.

So it’s essential that you check out the value of the surrounding homes in your neighborhood when making your list of improvements to stay on track with your upgrades and get the most for your money in the end.

How To Finance Your Home Improvements, Repairs, and Renovations

There are a lot of financing options available when it comes to paying for your home improvement projects. If the money isn't available in your bank account, or if you don’t want to drain your savings account, financing may be your best option.

Once you have finalized your monthly budget and determined your estimated project cost, it’s time to see what monthly payment you can comfortably afford. Some common unsecured loan options include: Home Improvement Loans, Personal Loans, and Credit Cards. Looking for secured financing? The most typical loans include Home Equity Loans, HELOCs (Home Equity Lines of Credit) and Mortgage refinances.

Government Loans such as a HUD Title 1 Property Improvement Loan or an FHA 203k Home Renovation Loan may also be an option. Review the current rates for the loan options that best fit your needs and estimate your monthly payment using a free online Home Improvement Loan calculator.

Need help deciding which financing option is right for you? Allegiance Credit Union can help, please reach out and contact us today!

For information on how long it may take for you to receive your home improvement loan money, review our blog "How Long Does it Take to Get a Home Equity Loan." 

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