When it comes to the best uses for a cash-out refinance, home improvements are high on the list. That's because many offer a great return on investment. Homeowners can improve their place of residence, enjoy the renovations while they live there, and then recoup most of the costs should it ever come time to sell. Some projects may even considerably add to the value of the home.
If you're considering a cash-out refinance for home improvement purposes, here are five projects that offer amazing ROIs!
1. Opening Up the Floor Plan
What's one of the most sought after features for new and experienced homeowners alike? More space. If you can't tack on an additional room to create more space, you can open up your existing floor plan. Whether that actually provides more space or gives the illusion of doing so, may not matter much. As long as the end result is open and inviting, it's a great project to complete.
Open floor plans are increasingly popular, so if you're looking to create more space for yourself while making your home more attractive to buyers, see what you can do to open up the space. Knocking down one divider or wall may make a world of difference.
2. Adding Curb Appeal
Enhancing your home's curb appeal is a low-cost way to increase its value, thus making it a great home improvement cash-out refinance project.
There are several ways to easily create curb appeal, from replacing your garage door and adding a fresh coat of paint to the exterior to adding lights or planting some flowers. Most exterior home improvement projects can be done in one weekend, making them excellent choices for homeowners with busy schedules.
3. Remodeling the Kitchen
A minor, mid-range kitchen remodel, when done right, allows homeowners to recoup nearly 80 percent of the cost, making it a smart cash-out refinance investment.
According to this home remodeling cost versus value report, a typical kitchen remodel can set you back around $23,452. That includes a new oven range, updated refrigerator, new flooring, freshly painted walls and ceiling, and new countertops. On average, this type of project adds $18,206 to the home's value, which means about 77% of costs are recouped.
A kitchen remodel is a fantastic home improvement choice, as it lets the homeowners enjoy the upgrades now while adding to their resale value.
4. Installing Energy-Efficient Windows
When it comes to homeownership, one question is at the forefront of potential buyers and owners alike:
How do I save money?
Energy-efficiency isn't just for appliances anymore. Now, homeowners can help cut down on their heating and cooling costs by swapping out their old windows for energy-efficient ones.
Since heating and cooling costs account for the majority of electricity bills, this is a great long-term, money-saving move to make. Swapping out old windows for energy-efficient ones can be an especially smart home improvement project to tackle if you know that you'll sell a few years down the road. Energy-efficient homes are quickly rising in popularity and will be a great selling point when the time comes. Plus, until then, you can significantly reduce your heating and cooling costs!
5. Opting for Hardwood
Gone are the days when carpet reigned supreme. Thanks to the many perks that come with hardwood floors, like:
- Ease of cleaning
- More cleanliness when compared to carpeted counterparts
Replacing worn carpet with hardwood floors is a great long-term investment. Plus, this kind of upgrade can really brighten up a room, making it look more inviting. Thanks to the ease of maintenance, hardwood floors are quickly becoming a must-have feature when it comes to finding a new home, which puts you ahead of the game should you ever put your house on the market.
Why Cash-Out Over Personal Loan?
When you use a cash-out refinance to fund your home improvement projects, you're tapping into the equity you've built and securing competitive rates. Personal loans tend to come with very high interest rates, which means you're losing money on your project before you even get started.
If you're looking for funds so that you can tackle some home renovations that add to your resale value, a cash-out refinance may be the right move for you. When borrowing money, it's important that you understand your bottom line for every option available.
Explore Cash-Out Refinance Lenders
With assistance from Lendgo, a completely free online platform that connects trusted lenders with borrowers, it's easy to secure a lender for a cash-out refinance.
Because there are no obligations to refinance, you can confidently explore your options right this instant. Once you have your cash in hand, tackle one or all of the above home improvement projects. You'll have an upgraded home to enjoy now, and a high resale value should you ever move!