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WHAT CAN I DO WITH A HOME EQUITY LOAN?

Basically, a home equity loan is going to give you a big lump of cash, and you can do any of three things with it: You can use it to make home improvements; buy something fun—such as a vacation; or you can use it to pay debt. Here are four small-scale home remodel projects that can improve the resale value of your home.

Replace the front door - There’s an old adage in real estate that suggests features get tours, but the front porch gets sales. People make decisions on home-buying all the time by starting with a gut reaction and finding reasons to support it later. Upgrading an old, poorly fitting front door with a newer energy-efficient model is a cheap, quick project that can instantly improve your home’s efficiency and aesthetic appeal. Best of all, hanging a door can be done in an afternoon, and has an ROI of 98%.

Minor kitchen remodels - Replacing major appliances and installing new flooring is a difficult, time-consuming and expensive task. Being without a kitchen for weeks on end can be a nightmare, but if you’re really not happy with your kitchen, it might be time for a new one in any case, and a home equity loan can make it a reality. However, you might not need more than a few minor kitchen upgrades, like new cabinets, counter-tops, and energy-efficient cook-tops, which are comparatively inexpensive. The average spend here is just under $20,000 with an estimated return on investment at an impressive 80%. Just like with the front door, the changes are mostly aesthetic. People perceive a more modern-looking kitchen as being a better fit than a more “retro” look.

Wooden decks - Outdoor space is one of the hallmarks of the current iteration of the American dream. Where else can a family sit and enjoy a frosty lemonade on a hot summer day? Watch the kids play in the yard while tending the grill on a beautiful wooden deck! The average cost of a new deck, based upon a 16 foot by 20 foot wooden deck, is $10,000. The average return on investment is just over 80%. This is because of the perception of expanded living space at a reasonable price. Adding a deck costs about $35 per square foot, while a square foot of inside space costs an average of $85. Decks are a great way to increase the play space for a modest cost.

Convert an attic space into a bedroom - For most homes, the attic is an afterthought. It’s a place where unused craft projects and abandoned hobbies go to die. Turning an existing attic space into a spare bedroom or office, complete with its own bathroom, can be done for a slightly steeper price. Nationally, the average cost is just over $50,000. That includes constructing a room, extending utilities to it and adjusting the exterior of the house to accommodate the new space. This remodel provides a 77 percent return on investment in resale value, with the potential for more. If you have adult children or relatives visiting from out of town, an attic room can be a wonderful guest room. You could also rent it out for additional income!

When you’re making improvements to your home, you’re not just making your life better in the short term. You’re also making an investment in your future. Ideally, the increase in the value of your home will exceed the cost of the improvement.

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