Should you use a home equity loan to fix up your house?

An epidemic has spread across the country. Turn on the television, flip through enough channels and you’ll eventually come across it. Yes, there’s no escaping it: America has caught the remodeling fever. People who loved everything about their home two years ago are now itching to update it with a modern barnyard decor or break down a wall or two.

Or maybe your home hasn’t been updated since disco. Its shag carpets and linoleum counters need to be updated like a taco needs a shell.

The big question is, how can you finance your remodel? Today we’ll look at the good and the bad of one popular option: taking out a home-equity loan.

The bad

The big danger with home equity loans is that for many people, they offer a quick and easy way to get a lot of money. If you don’t have a plan to pay back the loan, you can end up losing your house. So first and foremost, a negative aspect of these loans is that you’re risking your home.

Secondly, you want to be strategic in how you spend your home equity loan. This means you should be smart about what remodeling projects you decide to undertake. Try to do projects that will give you a high return on your investment and up the resale value of your home.

The good

If you have a solid credit history and are adept at budgeting and managing your finances, then taking out a home equity loan to remodel your home may make a lot of sense. One of the big reasons to do so now is that interest rates are still at historic lows. This won’t last forever, so if you’re ready, now might be the right time to get started on those home renovation projects you’ve been dreaming of!

To learn more about how you can get your home in great shape, talk to a Coldwell Banker Hedges Realtor® today. They know the industry and have plenty of tips on how you can finance your housing dreams.

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