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2.875% (2.938% APR) 30yrs
2.375% (2.381% APR) 15yrs
as of 01/25/21
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Renovations That Can Add Value

Renovations That Can Add Value Web

These renovations can increase your home’s value and make refinancing easier.

Whether you’re selling a home, refinancing a current mortgage, or trying to increase your home’s value, renovations can increase the equity you own and add to your financial well-being. 

Renovations aren’t just good for your home, they’re good for your finances! Investing in certain projects around your home can help you to get a better price when you sell. Or, if you increase your home’s value with a renovation, that can immediately increase your equity and result in better rates if you’re looking to refinance. Read on to learn more about how high-value renovations can be a bargaining chip for your mortgage.

How to Start

Remodels can be costly for any homeowner, and if you are planning renovations, it may be helpful to know which ones can earn the highest return on your investment. Take into account the benefit that you will get from a refinance as the homeowner, the cost of the project, and the value that your home will gain. Many renovations will not add enough value to completely negate the cost of the project, but when you consider the personal benefit to you, a project will likely be worth completing.

Want to increase your equity in your home with less dust? Learn how!

Do Your Homework

Before you begin a renovation, it’s important to find out the amount of value that a renovation could add to your home. Typically, a contractor, realtor, or your mortgage officer can all be helpful during this conversation. You can also find a cost and value report from many sources, including your preferred realtor. This can help you to see the average cost of a renovation in your area and how individual projects adds to a home’s estimated value. 

Popular Renovations

Not every home project has to be based on equity gained—some may just be for the benefit and enjoyment of the homeowner. Typically, even personalized updates can gain some value for your home. But if you consider some of the more popular and equitable improvements, there may be some that are easily accomplished at the same time. The most popular areas of improvement are outdoor areas, such as decks, front porches, garages, front doors, and siding. Indoors, high-value renovations include bathrooms and kitchens, as well as lighting and fixtures.

Build your equity

Remodeling your home can help you to enjoy it more while you live there, and it can add value to your home as well. If you refinance your home, renovations will add to the property value when an appraiser assesses your home’s current market value. A higher home value means you’ll have more equity, creating a lower loan-to-value ratio because you own a percentage of a home that has more value. This can help you to get a better rate on a refinance.

The loan-to-value ratio is the amount of your mortgage (loan) over the value of your home. If your home’s value is appraised at $300,000, and your mortgage loan is for $250,000, your loan-to-value ratio is 83%. When you have a lower loan-to-value ratio, you may have a better chance of refinancing with a lower mortgage rate and/or eliminating mortgage insurance.

Do you have questions about refinancing? Get the details here.

Cash in on Your Remodel

It’s important to note that some projects will not return in a higher resale price, but will add to your home’s equity and create more enjoyment or practical use for you in your home. By adding value to your home, your equity will increase. Choosing to start a renovation is more than a labor project, it’s a financial one! Assess how much you will spend on a renovation and the value that it could add to your home. It is also likely that the value of your neighborhood is fluctuating over time as well which can add to your home’s value.

Are you ready to learn about your options for a refinance, new mortgage, or investment property? Contact RatePro Mortgage to learn more.

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