Stuck at Home? Might as Well Update it
Posted: January 12th, 2021
COVID-19 Leads to Home Renovation Boom
This year, we’re betting you’ve spent more time at home than ever before. Even for those of us who regularly worked from home before the pandemic began, the shutdown of most of our favorite coffee shops and public workspaces means almost all of us are getting very acquainted with our homes -- and all of their quirks and flaws.
It turns out that a huge number of Americans decided to remedy those quirks and flaws and improve upon their living spaces this year. Houzz.com, a popular online platform for home renovations, “reported a 58% annual increase in project leads for home professionals in June,” according to CNBC.com.Traditionally, bathrooms and kitchens are among the most commonly renovated spaces in any house; however, many homeowners focused elsewhere in 2020.
The most popular types of renovations
Of the top five most popular types of home renovation projects in 2020, bathrooms maintained the number one spot. Instead of kitchens, though, decks were the second most popular home improvement projects. Indeed, homeowners focused heavily on their outdoor living spaces this year, with patios and porches also making the top-five most popular list according to Bankrate.com.This makes a lot of sense when you think about it -- as options for safe entertainment have momentarily dwindled, homeowners sought to create their own private backyard getaways.
As more people plan to spend extra hours at home for an extended period of time, they need ways to make their property multifunctional. For many, the beginning of quarantine meant that their homes had to serve as offices and daycare centers, too. Renovation projects that involve outdoor living areas help homeowners by creating enough space to separate those activities and leave room for alone time.
Payment options for home renovation projects
According to Bankrate.com, recent surveys by the National Association of Homebuilders indicates that people have been undertaking renovations at a wide range of price points. While most people are focusing on projects that cost less than $20k, there has been notable demand for large projects -- those that cost upwards of $50k.
While some homeowners prefer to have cash on hand before they get started on their renovations, there are financing options available to help you get the job done when you’re ready, and on your terms. Of course, you can always use a credit card or take out a personal loan for smaller projects, but if you’re interested in starting on a large project, some home-specific financing opportunities may be available.
Cash-Out Mortgage Refinance
This option allows you to cash out equity from your home. Low mortgage rates have made this an attractive option for homeowners this year. Of course, it’s important to realize the implications of taking out a larger mortgage for cash. Be sure to speak with your financial advisor before choosing any of these options.
FannieMae Homestyle Loan
The Homestyle Loan allows borrowers to combine their home loan and their renovation loan into one payment. This allows you to save on interest rates and closing costs. This type of loan allows you to borrow against your home’s “After Repaired Value” (ARV) instead of the current value of the home, according to Forbes.
HELOCs and Home Equity Loans
These are great options if you’ve already paid down a good deal of your mortgage. Bankrate says that most HELOCs and Home Equity Loans allow you to borrow up to 85 percent of the value of your home, minus mortgage payments.
Starting your renovation project
Once you decide what areas of your home to update and you’ve secured financing, you need to find the right contractors for your project. Ellingson Properties’ sister company, Echelon Builders, specializes in custom remodeling projects of any scope. From single-room renovations to whole-home overhauls, our team is ready to turn your visions for your ideal home into a reality. And yes -- we do cabanas and outdoor additions!
Have you undertaken a renovation project this year? Tell us about it on our Facebook page.