Home improvement is a big part of the home construction industry. People do it for a variety of reasons. It may be to upgrade or renovate a space, or it can be for safety or personal preference. But regardless of why you’re doing it, you should make sure you have a budget, stick to it, and plan carefully. Otherwise, it can end up being more costly than you planned.
There are two types of home improvement loans. The first is a government-issued loan. This type of loan is issued to you based on the equity you have in your home. However, the requirements differ from state to state. A home equity loan is secured by your home and the loan cannot exceed 85% of your home’s value. You can also get a federal loan, which is unsecured.
Another type of loan is a personal loan. These loans tend to have higher interest rates than government-issued loans, but they don’t require you to have collateral or use restrictions. They are ideal for people with good credit who want a flexible loan.
Home improvement projects can cost thousands of dollars, especially if you decide to go the luxury route. Buying an extra deck or bathtub isn’t worth it, so you’ll have to be careful. If you’re looking to add value to your home, you should focus on improvements that increase the livability of your home, such as installing a new kitchen.
According to a survey conducted by Minneapolis marketing firm Axiom, about 85 percent of homeowners plan to start a home improvement project in the first half of 2021. Of the respondents, the most likely project was to fix the outdoor area. Among the survey’s responses, more than 40 percent of those under 55 years of age were planning to do their own home renovations.
Another survey by the Harvard Joint Center for Housing Studies found that the home remodeling market will experience a surge during the first two months of the year. In general, though, home prices rose 20 percent in the last year. That means that your home won’t be as valuable as it once was if you make changes to it.
Almost half of the homeowners who responded to the survey said they intend to hire a professional for a large portion of their project. While a contractor can be helpful, you should still verify his or her credentials, insurance, and references. Some companies offer unlicensed services, which can be an important consideration.
Although the survey results show that most people are planning to do more home projects in 2021, it isn’t a guarantee. About 16 percent of homeowners surveyed said they weren’t planning any major renovations. Meanwhile, about eight percent of respondents plan to do projects that will cost more than $10,000.
The Axiom survey also asked about home improvement projects that consumers have already done in the past. While some of those projects were relatively simple, most were a little more complicated. For example, 45 percent of the respondents had a bathroom update, while 22 percent were adding a master suite. Adding extra bedrooms and bathrooms can increase the value of a home.