4 Best Ways to Use Home Equity in 2023

Whether you want to sell in the near future or you are looking for ways to improve your own living space, renovation Often a large part of home ownership. They can also be an important way to ensure that you are protecting the investment you have made in your home.

Some parts of the country have Still enjoying high home values when Prices are falling Elsewhere, however, any homeowner can benefit from improving their home. Also, with low cost financing resources Home equity loan And Home Equity Lines of Credit (HELOCs)It can be affordable.

But sometimes, finding the best way to spend your money can be a hurdle. To help you get started, we’ve rounded up a few things you can do this year that will also get the highest return on your investment.

If you’re thinking about taking out a home equity loan or HELOC to increase the value of your home, you may want to put some of these projects at the top of your list.

Thinking of a rebuild? Compare today’s top home equity rates now.

Why use home equity for home renovations?

As a home owner, Equity you have created One of the best assets you have when it comes to your home To improve or renovate.

for one, Home equity loans and HELOCs tend to offer Good interest rate than a personal loan or high-interest credit card. Today, you can qualify for rates as low as 7% APR, depending on you Credit score and other details of your application. In contrast, many of the best personal loan rates start at 9% to 10% and credit card rates at 20% or more.

In addition to potentially lower interest rates, renovations are one of the best uses for home equity Tax benefits. In certain cases, the interest that accrues on home equity loans or HELOCs may duty free.

As long as the borrowed funds are “used to purchase, construct or substantially improve the taxpayer’s home that secures the loan” According to the IRSYou may be able to deduct the interest from your taxes.

Learn more about home equity rates you may qualify for today.

4 Ways to Use Home Equity and Get Best Returns

Use this guide before starting your home project to help ensure you get the best price.

Focus on the exterior

You’ve probably heard of curb appeal, so it’s no surprise that many of the most valuable home improvements are focused on the exterior of your home. From small jobs like new exterior doors to larger projects like replacing vinyl siding, improving your home’s exterior can be incredibly valuable not only for its visual appeal, but also for its potential resale value.

Update your HVAC system

If you have an HVAC system that runs on gas, you can improve the quality of your home — and potentially save on your own heating costs — by switching to an electric heat source. While it can be a significant financial undertaking, electrical upgrades can also help improve the value of your home over time. Also, it is a way to avoid being affected by inflationary gas price hikes.

Look for smaller projects

You can save both time and money by focusing on small home projects that make a big difference in your home. A fresh coat of paint in the kitchen, for example, or fresh landscaping in the front yard can help make your home feel fresh and inviting. Not only do smaller projects cost less money — improving your chances of a bigger ROI — but you can get started on your own time, often without more expensive professional help.

Make sure you can afford the cost

Avoid making a major or long-term renovation that you can’t afford, no matter how much value it adds. If you’re tapping into your home equity to fund a home improvement project, the most important way to ensure you’re getting the most value possible is by making sure you can afford to pay back the money you borrow.

Home equity loans and lines of credit are secured by your home. While this may help you get a great interest rate, it also means you could potentially lose your home if you’re unable to repay your loan. Make sure you read the fine print in your loan agreement and understand in advance how much you’ll pay each month, so you can enjoy the full value of your home equity loan or HELOC.

Ready to take on a home project? Start comparing top home equity options today.

Bottom line

Taking on a renovation or even a relatively small home improvement project can cost a lot of time and money. To make the effort worthwhile, it can help to choose projects that offer the best value for your money. By doing this you can improve your current living space and make the most of it house price If you decide to sell in the future.

No matter what project you decide on, consider whether a home equity loan or HELOC might be a good financing option for you. Not only can you score a lower interest rate than other loans, but you may also qualify for valuable deductions during tax season.