Spring Forward with Home Renovations This Spring

March 9, 2023

Man checking level while dog looks on

Spring is known as a time to start fresh, which makes it one of the most popular times for home improvement projects. And, with high home prices and many owners on the sidelines waiting for a better time to buy their next home, this spring could be a great time to tap into your home’s equity to cover the renovation costs.

Are you considering using the upcoming months to tackle some routine maintenance like roof repairs or new windows, or take on a major renovation like an addition or patio remodel? If so, there are a few ways to maximize the value of your home in order to spring forward with your plans. But first things first…

What is home equity?
Home equity is the current market value of your home (what you could sell it for today), minus what you owe on it (your remaining mortgage). This means that if you make a 20% down payment on a house, you immediately have that amount of equity in the home. The smaller the down payment the higher the mortgage and the less home equity you will have to start.

After that, the equity in your home may fluctuate for many reasons, including the rise and fall of home values in your community, your home’s condition, the number of homes on the market nearby, and more.
Because your home’s equity is an asset, you can borrow against it to access cash in the form of a loan or line of credit to meet your financial needs. Many will use this cash  to cover improvements that could add value to their home. BayFirst offers three great options for those looking to do just that:

What is a HELOC?
A Home Equity Line of Credit (HELOC) is a line of revolving credit similar to a credit card, which allows borrowers to draw money as they need it, rather than in a lump sum. With a HELOC, funds can be accessed any time, but cannot exceed the amount originally set when the line of credit was approved.  Rates associated with HELOCs are typically adjustable, meaning they will likely change over time, but you will only pay interest on what you spend.

What is a Home Equity Loan?
A home equity loan (sometimes referred to as a second mortgage) allows you to borrow a lump sum against your home’s equity for a fixed rate, meaning you’ll pay your loan back in fixed installments over a predetermined period of time.

What is a Home Improvement Loan?
Though HELOCs and Home Equity Loans can be used to cover almost any expense, Home Improvement Loans are designated for only large home renovation projects, including additions, kitchen remodels, new pools, or HVAC replacements.  Lenders offering this type of loan will allow you to borrow a percentage of what your home is worth minus what you owe on it. At BayFirst, this can be as large as 125%.

Tax Advantages
Need another reason to tap into your home equity to cover a home-related expense? There are tax advantages involved as interest paid on a line of credit or loan used specifically for home improvements and repairs is typically deductible, while interest paid on a loan used for other expenses (like college tuition or credit card debt) is not. Just be sure to consult a tax professional who can advise you appropriately before moving ahead.

Ready to spring ahead? Talk to a BayFirst personal loan expert about the best way to maximize the equity in your home this spring (or anytime). Because the best home improvement project is the one your home pays for itself. Give us a call, stop in today, or fill out the form below to learn more or apply here.

Help us prevent spam


Equal Housing Lender Better Business Bureau Accredited Business Member FDIC

© 2024 BayFirst National Bank, Member FDIC, Equal Housing Lender
NMLS ID 806183 | NMLS Consumer Access

Bay First Financial
700 Central Ave St Petersburg FL 33701

To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account.

What this means for you: When you open an account, we will ask for your name, address, date of birth, and other information that will allow us to identify you. We may also ask to see your driver’s license or other identifying documents.

Zelle and the Zelle related marks are wholly owned by Early Warning Services, LLC and are used herein under license.

You are now leaving the BayFirst website. By clicking the 'OK' button below, you will enter a different website created, operated and maintained by a private business or organization. BayFirst is not responsible for the content, views, or privacy policies of this website. We take no responsibility for any products or services offered by this website, nor do we endorse or sponsor the information it contains. In addition, websites may change location, ownership and address frequently. BayFirst is not responsible for the accessibility of this link. Would you like to continue?