Happy Home Improvements and How to Finance Them

Summer brings warm weather, baseball games…and home improvement projects! Are you planning to spruce up the bathroom, remodel your kitchen or landscape the front yard? Doing any of these could add value to your home. If properly maintained and improved, your home could be an investment; if neglected, you run the risk of losing value and have to pay for costly repairs.
Once you’ve decided to tackle a home improvement project, the next step is determining how you will pay for it.

• The thriftiest way is to pay cash. The old-fashioned, save-for-that-big-project method that gives you the freedom to walk into a store, pay for everything and leave without signing any paperwork. You can save for these projects in traditional savings accounts or Money Market accounts. These liquid accounts give you easy access to your funds.

• Currently, rates are favorable, so you might consider a Home Equity loan, or a HELOC (home equity line of credit). Both of these products let you use the equity in your home to finance any number of things. The interest paid on home equity loans could be tax-deductible*, as well. You also will pay a lower rate than traditional consumer credit cards, making the project less expensive overall.

• Are you looking to go green? Government solar energy incentive programs are available through which you could potentially receive tax credits for purchasing Energy Star appliances.

• If your credit is good, you might consider looking into home improvement store credit cards, such as Lowe’s, Home Depot or Nebraska Furniture Mart. These are good for projects that are $10,000 or less and you are able to pay the total off in six months or one year. Many of them provide no-interest promotions, but be careful, because if you take longer than the promotional period to pay off the balance you could be hit with very high fees and interest rates.

If you are considering looking at the home equity option, discuss all the possibilities with your local lender. Everyone’s situation is different, so it is important to talk about the options with a knowledgeable staff member and know what you are getting into.
What projects are you starting this summer? Share them here.

* Interest may be tax-deductible. Please consult your tax advisor regarding the deductibility of interest.

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