Homeowners are staying in their homes longer, and yearn to make changes to suit their personal style and needs. Some already have wish lists laid out and regularly pin inspirational pictures. In fact, 78 percent of first-time homebuyers say they’ll update their home, with 1 in 10 planning to completely gut it.1
There are many reasons to renovate, but a top motivator is simply the age of your home. Nearly 80 percent of homes in the United States are at least at least 20 years old2 and many are much older.
Aging homes mean homeowners either want to modernize or need to replace well-worn parts of their homes. While these projects may be daunting, they can be worth it.
Modernizing your home can improve personal comfort, reduce utility costs, and may increase your home’s value.
Turning dreams into reality
So how can you stop dreaming, take on these remodeling projects, and remain on track financially?
For big renovations, doing some homework before diving in is essential. While a credit card can work for smaller updates or seasonal decorations that will be paid off in the short-term, it isn’t necessarily the best option for pricier changes like getting your dream kitchen, updating your bathroom, or replacing a roof.
To finance big projects, or even multiple smaller projects over time, the low rates and flexibility of a home equity line of credit (HELOC) can make sense.
With a HELOC, you obtain a predetermined line of credit based on a portion of your home’s equity. HELOCs typically have a 10-year period in which you can draw funds as needed, often at a lower interest rate than other financing options, and you only pay for the funds you use.
To stay on track, you can begin making monthly payments on funds you draw, so it’s a good idea to think about your repayment plan in advance. Also, as you pay down your balance, you can re-use those funds during the draw period, like when you’ve finished your interior projects and turn your attention to your outdoor living space.
Some lenders don’t charge fees to open or maintain a HELOC or draw funds, so it’s important to do your research. To learn more about how a HELOC might fit your needs, visit www.bankofamerica.com/HelocApply.
- Bank of America Homebuyer Insights Report, 2018
- Joint Center for Housing Studies of Harvard, 2019
Bank of America, N.A., Member FDIC Equal Housing Lender ©2019 Bank of America Corporation. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice.
