Creating Your Dream Home: How a HELOC can make it happen

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Equity financing can tap your home's hidden value to help pay the piper--or the builder.

Whether you're a super Jane or a home improvement novice, you've probably dreamed about unlocking the potential of your current house. Room addition? Swimming pool and patio? Kitchen remodel? Master Bath? These major projects are among the most popular choices for homeowners looking to take the next step[s] in increasing the value and enjoyment of their homes. Whether your motivation is simply to live a bit better or to unlock hidden resale potential, you'll want to go into any major renovation project with a clear sense of what it will cost and what to expect at each phase of the process.

Your first considerations are likely to be defining your project, how you'll pay for it, and who will do the work (keep that pink Be Jane tool belt handy!).

Financing your Way to a Better Home
Even if you do all the work yourself, remodeling can be expensive. The good news is that you are ultimately investing in your home and that financing options have never been easier. If the equity you've built in your home is equal or greater to the cost of the project, you may qualify for a home equity line of credit.

Smart additions and remodeling can certainly increase the value of your home. Done right, your project will both increase your quality of life (drinks on the new patio, a kitchen that helps you create amazing meals) and increase the resale value of your home. And of course, if you can learn to do some of the work yourself, you will be saving money in the process. For more information on what loans are available, go to

Certain projects that improve the energy efficiency of your home also come with financial incentives or rebates. Going green won't just make you feel like a good citizen, it can also mean more green in your pocket. In particular, look for rebates and incentives for incorporating solar power, energy-efficient windows, energy-wise appliances, and new insulation.

What Pays Off?

The Kitchen

If you are looking to make a home improvement investment, the kitchen is your best bet. Remodeling the kitchen will give you the most amount of return on your home's resale value. Think about it: what house hunter isn't wooed by a beautiful kitchen? According to Remodeling magazine, a kitchen remodel project typically recoups about 80% of the total cost within the first year--and more as time progresses. Again, if you perform some of the work yourself, you can expect an even higher return on your investment.

A major overhaul can be made possible through a loan if you have accrued a certain amount of equity, but simple upgrades too can go a long way. When thinking about remodeling your kitchen, you don't necessarily need to gut the entire space. Carefully choosing your projects such as adding or upgrading a kitchen island or countertops, refinishing your cabinets, and adding track lighting are all do-able projects that can modernize your kitchen without breaking the bank.

The Bathroom
Second only to kitchen makeovers, a bathroom remodel will help increase the value of your home. Today it is less about function and more about spa-appeal, so if you are thinking about remodeling, think luxury. Towel warmers, Jacuzzi tubs and beautiful fixtures all add to the spa experience. Adding a bathroom is another great way to boost resale value. If you are thinking about moving any fixtures such as sinks or toilets, you may be in for some extensive plumbing work, so before you pick up that sledgehammer, call a contractor.

The Bedroom and Beyond
Adding a bedroom is a common remodeling choice that can definitely increase the value of your house--both now (finally, a room for everyone) and later (an additional bedroom can put your house in a different class of home for sale). A master suite addition can return 72% of costs within the first year, while adding a second story can ultimate recoup even more. Prominent on just about everyone's wish list: big windows. You can't overestimate the power of light to make a home look larger and more appealing.

A bit of advice: adding a second story is a major undertaking; consulting an architect and general contractor is probably wise--even if you plan to do much of the work yourself.

For more ideas, think outside the home. Decks, patios, pools, overhauled back yards and sunrooms are all very attractive to prospective buyers. Decks tend to recoup their costs the fastest, but remember that this is your house. A new pool, gazebo, guest house or greenhouse may be just what's needed to boost the love and pride you have for your home.

Do your Homework

Before you jump in, know what materials will work best with your home. While the goal may be to increase functionality, you don't want to infringe too much on the character of your home. Of course, if that style includes faux wood paneling, that may be something you can do without! If you are unsure of your home's era, or what materials will work best with it, do some research. A professional architect or designer can give you great ideas and can often be hired by the hour.

Also, when considering a loan, shop around for the best deal possible. Look for minimal or no fees, discounts for existing bank customers, affordable monthly payments, and ready access to your money; a credit card tied to your home equity line provides ultimate flexibility. Take all factors into account so you can devote more of your money and energy to your projects and not to bank fees.

If you're wondering whether you can do some of the work yourself--you can! Depending on the project and your experience level, tackling some or all of the projects yourself will do more than save you money--it'll give you a place you can be doubly proud of. Check out Be if you're wondering whether to do it yourself or call a pro?

Be Realistic
No matter how much blood, sweat, tears and money you pour into your home, the ultimate determiner of price is time. Even with the most needed or beautiful of upgrades, don't expect to boost your home's value by much more than 25%. Your neighborhood is also a key factor. The nicer the homes are overall, the higher your property values will be. (If that's not a reason to go around teaching your Jane skills, we don't know what is!)

The bottom line is that a major remodel, carefully researched and backed by flexible financing, will help you get the house you've been dreaming about.

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