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National Mortgage Rates 09 February 2012
| Loan Type | Today | +/- | Last Week |
|---|---|---|---|
| 15 yr fixed | 3.14 |
|
3.15 |
| 30 yr fixed | 3.84 | - | 3.84 |
| 5/1 ARM | 2.75 | - | 2.75 |
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Getting the Best Return on Home Improvement Projects
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- Kirk Haverkamp - MortgageLoan.com
Thinking about doing some home renovations? Wondering which projects will give you the best return on your money?
Perhaps you just bought, or are planning to buy, an older home and are trying to decide what improvements would be the best use of your time and money? Or maybe you’re trying to sell your home and want to know which upgrades will provide the biggest boost in appeal for the fewest dollars?
It’s an old saw that you never recover your investment in a home improvement project. But that isn’t necessarily the case, according to a report just released by the National Association of Realtors (NAR). In fact, depending on where you live, some home improvement projects could even make you money when you sell the home.
Interest in home improvements is high right now. Mortgage interest rates are low right now, so it’s a good time to take out a home equity loan or line of credit (HELOC) to finance those upgrades, provided you have good credit and equity to draw upon. For home buyers, the FHA has a program that allows you to borrow money for certain improvements as part of the mortgage you use to purchase the home.
Entry door has big impact
So what are some of the most cost-effective upgrades? According to the NAR, the best is one of the smallest – replacing the entry door. In fact, when using a medium-priced steel door replacement, it’s the cheapest and most profitable of all the upgrades the NAR studied – with a typical job cost of $1,172, it produced a typical return on investment of 128 percent! The reason is simple – the entry door is one of the first things people see when they come in the house – and first impressions count.
Several other high-impact, low-cost upgrades, according to the NAR, involve siding and window replacements – all for under $14,000. Along with a new front door, these made up six of 10 projects offering the best return on investment. Window replacements, either wood or vinyl, typically brought around a 76 percent return, while new siding – either vinyl, foam-backed vinyl or fiber-cement – brought a return of around 80 percent. The addition of a wood deck, for an average of about $10,600, also brought about an 80 percent return on investment.
Converting attic space
Of the high-cost projects, the most profitable was converting attic space into a room – showing the advantages of expanding living space. This project typically ran about $50,000 and provided a 83 percent return nationally, and produced a greater-than-100 percent return in 14 of the 80 cites surveyed. A basement remodel was typically more costly and produced a lower return, averaging $63,000 and 75 percent, respectively.
Other projects that produce decent returns were a minor kitchen remodeling, with a 78 percent return, and a mid-range bathroom remodel, at 71 percent. High-end remodels of these rooms had significantly lower returns.
The least-cost effective renovations in the survey were a home office remodeling and a sunroom addition, both of which produced returns of only about 50 percent.
Mini-projects can have big effect
For homeowners not wanting to take on a complete room remodeling, the study also cited a number of small projects, costing only a few hundred dollars or less, that can brighten up a home and make it easier to sell. These include using inexpensive tile add a backsplash along a kitchen counter or redo a bathroom; refinishing the doors on kitchen cabinets and adding new hardware, putting in a few new bathroom fixtures instead of a complete remodel, replacing old light fixtures anywhere; brightening up a dingy basement by sealing cracks and painting both the walls and concrete floor a light color, and dividing a large space into two rooms by adding a wall, thereby creating an extra bedroom.
Again, home improvement projects typically don’t earn back the money you put into them, but they can make a house easier to sell and increase your own enjoyment of the property. And if prices do rebound over the next few years, the return on your investment may increase as well. From a cost/value standpoint, it’s best to keep things modest – a few modest projects will likely produce a better return than one big glitzy one.
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National Rates
| Loan Type | Today | +/- |
|---|---|---|
| 30 yr fixed | 3.84 | |
| 15 yr fixed | 3.14 | |
| 5/1 ARM | 2.75 |
Rates may contain points
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