Maximizing Your Home’s Value: How a HELOC Can Help

Even if you aren’t thinking about selling your home right away, you’re probably thinking about what it’s worth. Most Americans consider real estate to be the best way to build personal wealth, CNBC says (even if that’s just one benefit of owning a home).   

If you were to put your home on the market today, tomorrow or two years from now, how could you get the most value out of that investment?  

You can’t control location, real estate market conditions or interest rates, all of which may affect a home’s value. But you can control how immediately appealing and ready to sell your home is. And a Home Equity Line of Credit (HELOC) can help. 

What is a HELOC?

A HELOC is a line of credit that’s secured by the equity in your home, or the difference between what you owe on your mortgage and the home’s current market value. One example: If your home appraises at $300,000 now, and you owe $200,000 on your mortgage, your equity is $100,000. 

A Home Equity Line of Credit might go up to 80% or 85% of your equity, depending on things like your credit history and loan-to-value ratio.  

A few advantages: You’re able to borrow money as you need it, rather than maxing out your borrowing limit up front, and you pay interest on what you borrow, not your limit. Since a HELOC is secured by your home, interest rates are typically lower than unsecured loans too. 

How could a HELOC help you?

Related data from 2022: In 36 out of America’s 50 largest cities, fixer-upper homes listed for at least 25% less than a move-in-ready home. 

If you’re hoping to get the most value out of a home, making repairs, updates or upgrades can be a step in that direction, and a HELOC might be the way to fund the changes you need or want to make. 

Beyond improving its value, repairing or renovating your home might also speed up the selling process or make the space a better fit for your family and lifestyle while you wait on the right time to sell. 

Using a HELOC to add value to a home

A few ROI-friendly home improvements a HELOC could help with:  

Renovations and upgrades 

According to the National Association of Realtors’ 2022 Remodeling Impact Report, some of the projects that offer the biggest return on investment include refinishing or adding new flooring, converting a basement or attic to a living area, or renovating a kitchen or bathroom. 

Improving curb appeal  

In NAR’s 2023 Remodeling Impact Report: Outdoor Features, 92% of Realtors recommended that sellers invest in curb appeal before listing their home. A HELOC can fund landscaping, painting or updating your front door, all of which can make a big difference in your home’s first impression.  

Upgrading energy efficiency  

New or better insulation, replacement windows, energy-efficient appliances — all of those can help cut monthly utility bills and make a home more attractive to potential buyers. And they can all be financed with a HELOC. 

Staging before selling  

Many Realtors recommend home staging, saying it can help boost the sale price and shorten the time before closing. One industry survey claimed that home staging helps quicken the selling pace by three to 30 times and increase sale price by up to 20%. No staging company can guarantee those results, but home sellers hoping to close in a hurry might consider the benefits. If you choose to explore professional home staging, a HELOC can help you pay for it. 

Help with your HELOC

Have questions about whether a Home Equity Line of Credit is a good funding option for your home and family? Our community bankers can tell you more and share information about other lending options that might fit your needs.   

Find your nearest branch location here, or contact Merchants & Marine Bank online.