How to Fix Up Your House & Boost Resale Value in Michigan

Home improvements are a perfect way to invest in your home and your future. There are factors that must be considered when deciding what improvements to do and how to finance them. Here are 5 ways to finance your home improvements to help increase home resale value.

1. Credit Card – Dedicate a credit card for the cost of materials, then you can get what you need up front and collect reward points, to boot. There are many incentive programs available that reward credit card users handsomely when they use their card. Home improvement materials do tend to be expensive, so if you have the means to pay your credit card bills in due time, then this may be the right option for smaller renovations.
2. FHA 203(k) Loan – Instead of having an additional loan, you can roll your home improvement costs into your preexisting mortgage, so there is only one payment per month. The total borrowed amount consists of the home price and the estimated repair costs, plus materials and labor. FHA loans are offered in banks and credit unions, like Flagstar Bank or First Federal of Northern Michigan. There are 2 types of FHA 203(k) loans.
1. Streamlined 203 (k) loans are used when there aren’t any structural repairs and total cost is no more than $35,000.
2. Regular 203 (k) loans usually involve structural changes, additions, or any other work that restricts residents from living in the house during work.
3. Home Equity – Depending on whether you want a fixed or variable rate attached to your financial solution, a home equity loan or line credit are two great options. There are many banks and credit unions that offer this option, such as PNC Bank, Genisys Credit Union, or Michigan State University Federal Credit Union.
1. Home Equity Loan – If you have a firm understanding of how much a project will cost, then having the fixed rates and terms of a loan may suit you best.
2. Home Equity Line of Credit – If you need a little more flexibility, a HELOC may be a better option for you. With a credit limit, you can use it when you need it and pay different amounts month to month.
4. Energy-Efficient Mortgages (EEMs) – If the improvements to be made are going to improve the energy efficiency of your house, an EEM is worth researching. Energy Star has conventional, FHA, and VA mortgages available. Even if you don’t end up getting a mortgage through these programs, it is a good idea to evaluate how energy efficient your home is.
5. Cash – Good old-fashioned cash is the most foolproof way to finance anything. Spending a lot of money at once is not possible for everybody, but saving money for a future renovation would benefit you and your family. With loans, lines of credit, or credit cards interest is piled on top of the actual cost for the materials and labor. With cash you pay once and do not have any additional charges. You could still use a credit card to collect reward points, but be sure to budget your lifestyle to be able to pay it off straight away.

Fixing up your house can end up paying dividends. If you are looking to put your house on the market, the improvements that you make could boost the sale price significantly. An affordable financial solution can make a huge difference.