By Billy Aldridge
As everyone knows, the economy has been in the toilet (pardon
the pun) for the past 5 years. As a
result people have been reluctant to put the time, energy and most importantly money
into improving their homes. Carpets have
been allowed to fray, faucets to drip and paint to peel. Now that home
improvement spending may actually be on the rebound, you might be asking
yourself if it is time to take care of a few of the honeydos that you have been
putting off for so long.
Historically, renovation spending has made up about 25
percent of total construction expenditures and now accounts for about half of
the market. From a financing
perspective, where it has been difficult to secure a mortgage to purchase a
home, bankers are much more willing to extend credit for home improvement.
If you are planning a major improvement that will set you
back tens of thousands of dollars, you might like to consider a home equity
line of credit (HELOC). When selecting
the best financing options,
remember that if you go the Heloc route and fail to repay the loan, you run the
risk of losing your house, because these loans are secured by your house. There are a few other factors that you might
like to keep in mind as well.
Although rates on home
equity loans are relatively low, they’re typically also variable. That means if
you obtain a 10-year home equity loan, the interest rate can go up if interest
rates rise. Will you be able to continue making loan payments if the payment
amount increases? – Rapid City Journal
Besides, Helocs are not the only way to finance a home
improvement project.
Lowes and Home Depot Credit Cards
Lowe’s and GE Retail Bank offer a consumer credit card
that features no annual fee, a 0% financing offer, and a 5% discount on
purchases. This card is a store card that is not affiliated with a larger
payment network. Therefore, it can only be used for purchases from Lowe’s.
Purchases made with this card are eligible
to receive a 5% discount, although that offer is not valid on purchase of
services, gift cards and some appliances. In addition, this offer cannot be
used with any coupon, military or employment discounts, or low-price guarantee.
Instead of receiving the 5% discount, cardholders can receive six months of
interest free financing on purchases over $299. After the promotional rate
expires, the standard interest rate is a hefty 24.99% – about 10% higher than
the national average rate on standard credit cards.
The Home Depot also offers a store credit
card through Citi. Like the Lowe’s card, it is not part of a payment network
and it can only be used at their stores. And while it does not currently offer
an in-store discount, it does presently provide 6 months of promotional
financing. The standard APR on this card is variable with the lowest rate about
4% above the average rate for general credit cards – 17.99%. Other consumers
may be approved and offered rates of 21.99%, 25.99%, or 26.99%.
However, in store offers for the Home Depot
card can vary dramatically. A recent example was a 0% APR for 18 months promo.
While appealing, this promotion was 180 degrees different than what is offered
on a 0% APR credit card with a 0% for 18 months promotion.
On the latter, no interest is levied during the 18 month 0% period. -SmartBalanceTransfers.com
Of
course, the bottom line in deciding whether or not to bite the bullet and spend
the bucks comes down to “What’s in it for me?”
Notes a recent CNBC article – “Some home renovations pay off at a much better rate than others,
according to a report from ISoldMyHouse.com, a for-sale-by-owner website.Projects geared toward the homeowner's particular
tastes, like the addition of a home music studio, have the least positive
effect on asking price," says Owen Gilman, President of ISoldMyHouse.com.
"Projects that most anyone can appreciate, such as a revamped bathroom,
tend to boost sales price the most."
Most everyone agrees that home improvements add value that
can be redeemed when it’s time to sell. But
that shouldn’t be the only criteria that should motivate you into giving a home
improvement project the green light. Investing
in your home also means that you will be able to add to your enjoyment while
you live there. And that’s priceless.
Billy
Aldridge is one of the Doctors of Plumbology at Aldridge and Sons Plumbing, a
family owned and operated business located in Jacksonville, Florida. To read more helpful blogs and see money
saving how-to videos, go to http://plumbers-jacksonville-fl.com
HomeImprovements that Add the Most Value - CNBC Article
What’s the Best Option forFinancing Home Improvements – Rapid City Journal
Ideas to Help Save Money With Credit Cards – Smart Balance
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