Home renovation might seem like a bad idea with the pandemic still posing as a big challenge for a lot of people. The healthcare industry is trying to manage overworked frontliners and facilities reaching full capacity because of the virus. Businesses had to slow down operations to make sure their employees were also safe from the virus.
A lot of states gave down stay-at-home orders to try and minimize the spread of the virus according to NB News. This forced a lot of Americans stuck at home for weeks on end. It seemed manageable at first but as it drags on, some people were getting restless. For others, being stuck at home is giving them the urge to try and get some renovations done.
Why consider home renovation now?
Having to stare in at the walls for weeks on end could give you that idea to start improving and renovating your house. But why would you want to do it now considering all that is happening? Here are a few of the reasons that are making people choose to start a renovation project now.
Planning to sell in a few years
Life is about planning and preparation to help you reach your goals. You save for retirement from your first paycheck so you can retire when you want to in the future. You study well in college to try and prepare for employment in the industry of your choice. Though life may nudge you towards a different direction every now and then, the value of preparation is a vital key in pushing you forward. And selling renovation if you are planning to sell is a good example of that.
If you are already an empty nester, renovating your home renovation is a good idea if you are planning to sell in a few years. You might be considering a tiny house for retirement so you can maintain it better. Renovating your house now can increase its curb appeal to potential buyers. This can increase your home’s overall value and fetch you a higher price when you sell.
Improve living condition
If you have been staying at home all day for the past months, you might start to notice all the improvements you can make around the house. Especially if you are about to have a big change in your family. It can be welcoming a new member in a few months or even setting up that business you have been working on.
If your family is expecting a baby in the next few months, this is a good time to get started with the renovations. This can be anything from preparing the child’s room or making sure the house is child-proof and safe. Setting up a business is exciting and you might need to set up a decent office space to run it from home.
There are other reasons why renovation or improvements can help you with your living conditions. You might want to have a home gym to stay in shape. This is important especially at this time. Eating healthy can also help boost your immunity so a garden where you can harvest fresh fruits and vegetables is also a good idea during this pandemic. This can also give you the chance to lower down your food expenses.
Getting ready to hand it down to your children
There comes at a time in your life where you want to get your affairs in order and leaving your house behind to family is one of them. Before you do that, you might find the urge to take on some minor home renovation projects to improve the house. It can be anything from a splash of new paint to fixing a wall in the house
How to finance your home renovation project?
Now that you have gone through some of the reasons why you would want to renovate your house at this time, the next question is much more important. Where do you get the money to undertake your project? Also, is it worth it at this time when there is a pandemic going on? Taking on a renovation project is a matter of weighing the pros and cons of the expense. If you believe it has more benefits in the long run, here are a few options in financing it.
Personal savings
The easiest and most straightforward way to finance a renovation project at home is by using your savings. You do not have to talk to a lender to get a loan and you do not have to worry about paying a creditor back with interest. The only thing you need to carefully consider is at a time when there is a health crisis, is it a good idea to dip into your savings to renovate your home?
The answer boils down to the benefit you get in fixing your home as well as your current financial status. If you set money aside specifically for renovation, then you have the funds to use it. It is just a matter of using it and making sure you do not go over budget. Once you do you could begin to dip into other important funds you need at the moment to get by.
Home Equity Line of Credit (HELOC)
The cost for any home renovation projects can vary depending on what you want to improve on. It can be a small part of the house or an entire room. From there, you need to have a firm grasp on the total cost of the renovation. From here, you can start looking at options where to get the money. One of them is taking out a second mortgage on the house with a home equity line of credit or HELOC.
As the name suggests, you are essentially borrowing money on the equity on your house payment. It is the amount you have paid on your home. A few things you have to remember with a HELOC is that during the initial years or draw period, you will only make interest payments but the rate is variable. After that, you will start repaying the principal amount. This is why this is a good choice if you do not know how much you will need for the renovation or if you are selling the house in the next few years.
Home Equity Loans
This is a lot similar to HELOC but apart from being a fixed-rate loan, you also start paying back the principal amount you borrowed. One good thing you get out of this set up is that you immediately start building and paying back equity on your property. Home equity loans are ideal if you already know the exact amount you need and if you do not have any plans of moving or selling in the next few years.
Personal Loans
Home renovation can also be financed by taking out a personal loan. But keep in mind that most personal loan applications could be attributed to the pandemic according to Experian. A lot of people are borrowing and taking out loans to help them make ends meet during this time. Also, there is a good chance that interest rates with personal loans are not going to be as low as secured loans like home equity loans.
Credit Cards
If you are going to take on a small project and need to pay for a few items only, you might be able to use your credit cards for it. Especially if this will help you gain points and rewards on your card which can help you offset some expenses for basic necessities. Be mindful though that with the health crisis still ongoing, you might need to use your credit for far more important expenses.
Home renovation at this time can make a lot of sense if you know exactly the long-term benefits it will bring as well as how you will fund it. As the pandemic still poses a challenge to a lot of households, taking this time to renovate or fix your home could benefit you in the long run.
