How Home Equity Loans Can Boost Your Property Value

Recently updated on September 21st, 2023 at 01:47 pm

Have you been living in your dream home for a while now but thinking about making some improvements? Maybe a kitchen upgrade, a fresh coat of paint or even that deck you’ve always wanted. Here’s how a home equity loan steps in to help you turn those dreams into reality.

What is a home equity loan and how does it work?

A home equity loan lets you tap into the value you’ve built in your home over the years. It helps convert your property’s increased worth into tangible financial resources.

Let us say your home is currently valued at $500,000, and your remaining mortgage balance is $300,000. The equity you’ve amassed is the difference between these two numbers – in this case, $200,000. Now, this isn’t just a number on paper; it’s a potential source of funding for your projects.

Check out the basics of equity loans in this article.

How to leverage home equity loans for renovations

So, how does this all translate into boosting your property value? Imagine you’ve decided to revamp your backyard and add a stylish deck for those summer barbecues. The estimated cost of the project is around $30,000. This is where your home equity loan steps up.

Home equity loans offer a direct route to financing your renovation or upgrade project. When you leverage the equity you’ve built in your home, you are essentially using your property’s increased value as collateral. This provides you with access to a lump sum of funds, which you can then use to fund your project. The great thing about this setup is that you don’t need to use your savings or disrupt your day-to-day finances.

The impact of home improvements on property value

Well-planned and executed home improvements can significantly increase your property’s value. Think of it as an investment that pays dividends not just in aesthetics, but also in financial returns. When you enhance the functionality, aesthetics or energy efficiency of your home, you’re essentially boosting its appeal to potential buyers. This increased attraction can lead to a higher future selling price.

The benefits of using home equity loans in financing various projects

When it comes to funding your home improvement projects and boosting your property’s value, a home equity loan in Australia offers some remarkable features that make it a smart choice.

Access to substantial funding

One of the standout features of a home equity loan is the ability to access a substantial amount of funding. Leveraging the equity you’ve built in your property allows you to secure a loan that aligns with your project’s scope and budget. Whether you’re planning a minor upgrade or a major renovation, a home equity loan provides the financial power to make it happen.

Competitive interest rates

Home equity loans often come with competitive interest rates compared to other forms of borrowing. This can translate into lower overall borrowing costs, which makes it a cost-effective solution for financing your renovation project. With manageable interest rates, you can focus more on enhancing your property’s value and worry less about high financing expenses.

Flexibility in use

A key advantage of a home equity loan is its flexibility in use. Unlike some other loans that are earmarked for specific purposes, a home equity loan gives you the freedom to allocate the funds as needed. Whether you’re renovating your kitchen, adding an extension or revamping your outdoor space, the choice is yours.

Quick and convenient approval process

Securing a home equity loan in Australia is often characterised by a relatively quick and convenient approval process. Since the loan is backed by the equity in your property, the application and approval procedures can be streamlined, allowing you to access the funds you need without undue delays.

Key takeaway

Home improvements aren’t just about aesthetics – they’re strategic moves to increase your property’s value. And when it comes to financing these transformative projects, a home equity loan can be a good option. This type of loan allows you to leverage your property’s potential to fund enhancements that not only make your living spaces more enjoyable but also boost your home’s overall worth.

At Mango Mortgages, our home equity loan offerings are designed to help you transform your home into a space of lasting value. From kitchen remodels to backyard makeovers, our flexible home equity loans provide the funding you need, without the hassle of credit checks or income assessments. With loan terms ranging from 2 to 24+ months and a commitment to simplifying the borrowing process, we’re here to support your journey toward property enhancement. Apply online here.

Mango Credit

Yanis Derums is the Founder and Director of Mango Credit– a leading private lender specialising in bridging loans for personal use and business short term loans for commercial and/ or investment purposes. Yanis has extensive experience with financial analysis, credit assessment, product structuring, and general business management