Home improvement is the process of making changes to your living space. It can include adding or improving infrastructure like the kitchen, bathroom and bedroom, or making cosmetic improvements such as painting, rearranging furniture or replacing flooring. Some home improvements are intended to increase the value of your home, while others can be made for more practical reasons. For example, if you run a business from home, you might install lighting and soundproofing to help boost productivity, or you may want to make your house childproof to prepare for the arrival of a new baby.
Unlike personal loans or credit cards, home improvement loans are distributed as a lump sum rather than an ongoing line of credit, and lenders consider your income and debt-to-income ratio during the loan approval process. It’s a good idea to pre-qualify with several lenders before beginning your project to compare rates and terms. You can also save time by gathering documents ahead of time, including proof of employment, income and assets, to speed up the loan approval process.
While some weekend warriors with well-stocked workshops can manage a number of DIY projects, it’s important to gauge your level of interest and skills before taking on a home improvement project. Also, remember that not every renovation will make your home more valuable, so consider the long-term impact of a particular improvement before pulling the trigger on it. For example, installing a water feature and koi pond in the backyard will likely add more to your utility bills than it’ll boost resale value.