There are many options when it comes to completing home improvement projects. You can choose to finance your project with a personal loan or a home equity line of credit. You can also take advantage of tax deductions for renovations that make your home more energy efficient. You should consider the cost vs. value of your project when choosing between two options.
Finance a home improvement project with a personal loan or a home equity line of credit
If you’re thinking about remodeling your home and need money for the project, personal loans are a good option. Unlike other loans, personal loans do not require collateral or equity to qualify for the money you need. However, you must consider the loan terms and the interest rate, which depends on your credit score, auto-draft settings, loan term and size. After completing the application, a member of our team will contact you within two business days to discuss your options.
While personal loans aren’t the best choice for large projects, they can be a great option for small ones. They are more convenient than traditional home equity lines of credit, which can take weeks to complete.
Tax deductions for energy-efficient renovations
There are a number of tax breaks available to homeowners who make energy-efficient home renovations. Not only can you claim home energy credits, but there are also government incentives to promote green building. You can find a list of these incentives by state at the U.S. Department of Energy.
The Energy Star program offers a tax credit for homeowners who install new windows and other energy-efficient improvements in their principal residence. However, this tax break is not available for improvements made to a rental property. However, this is a great reason to make energy-efficient home improvements, such as installing Energy Star windows.
Tax deductions are available for many types of energy-efficient home improvements, including new windows, insulation, skylights, and doors. Some of these upgrades can qualify for a tax credit of up to $500. This tax credit depends on the type of improvement you make, but typically, home owners can claim up to 10% of the cost.
Cost vs. value of projects
Historically, home improvement projects have not been good moneymakers, but the resale value of the same home has been improving each year. During the housing downturn, this trend didn’t change much. However, a new study by “Remodeling Magazine” has shown that the trend is now reversing. The study compared the construction costs of popular home improvement projects to the amount of value they would bring back at resale.
When looking to do a home improvement project, it is important to consider the neighborhood and type of dwelling. Most home improvement projects are out of place if they aren’t compatible with the neighborhood and price range. One common mistake is attempting to renovate a home above its neighbor’s. Many buyers are attracted to a particular neighborhood for its amenities and houses within the same price range. A home that is too far above the neighborhood’s standards won’t command as much in resale.
The National Association of Home Builders (NAHB) estimates that Americans spend about $200 billion on home improvements each year. According to the report, the most common renovations are kitchens and bathrooms. The highest ROI returns are often seen for projects that increase the curb appeal of a home.