Home-equity loans offer a cheap and easy source of funds. So, homeowners are always borrowing against the growing value of their properties. Borrowers use home-equity funds for many projects. But, financial experts agree that home improvement is the best way to use a second mortgage.
Experts from Trinity Builders of South West Florida, home remodeling authority in Fort Myers, explain why.
1. Interest paid on a loan for renovation is tax-deductible.
Before the December 2017 tax bill, interest on all home equity loans was tax-deductible. Today, home improvement is the only tax-deductible use of a home equity loan.
Assuming you meet all IRS conditions, interest is deductible on a debt of up to $750,000. That’s a good incentive to renovate and increase the value of the home you’re using as collateral.
2. Improving can avert unnecessary moving.
Do you feel you need a nicer home? Instead of looking for another house, consider making improvements to your existing home. A home remodeling expert can help you turn your home into the house you want.
Renovations will be more cost-effective than buying another place. And you don’t have to leave an abode you’re already attached to.
3. You get to increase property value.
Home renovations increase your comfort and the value of your home. That will help if you ever need to sell the place or need a larger home-equity loan.
4. Home renovations reduce the risk of bad debt.
Paying for a vacation or buying another car is not a good reason to tap into your home equity. You know that. However, when your home can be your ATM, it’s hard to resist the temptation. Using those funds for renovation will protect your home equity.
Some homeowners tap their home equity to fund just any other need and want. Remember, you are borrowing against your home, the roof over your loved ones’ heads. Use the money to make your home nicer and more valuable.