Miscellaneous Mortgage Refinancing Tips: Home Improvements that Pay Off

Home Mortgage Refinancing: General Info on Home Improvements

While it’s always fun and creative to improve your home, even if for a refinancing appraisal or a good use for your cash-out refinancing, there are a few that pay off more than others. When you’re deciding which ones to do, consider how long you will be there and what improvements will actually benefit the property.

Improvements for Pleasure

Some improvements we do simply for pleasure. For instance, if you have always wanted a bedroom with a skylight or a huge deck in your backyard, think about what you would get out of these at sales time. If you might spend $20,000 on a deck and only recover $15,000 of it, you have to decide if simply “having it” is worth $5,000 to you. However, this deck in a place like Colorado will possibly be worth much more if it faces the mountains and offers a beautiful view. The same deck in New Jersey that faces a factory wall will be worth much less. By similar logic, adding a $10,000 floor may bring the price of the house itself far too high for the neighborhood, and will automatically price you out of the local market.

Improvements as Investment: Preparing for Home Mortgage Refinancing

There are several areas that are generally considered to be worth the investment. While much of this depends on trends in your area, generally experts will tell you that improvements in the kitchen are worth the money. Fresh paint is good anywhere in the house, and can be used to brighten up a kitchen. If necessary, get new flooring installed—often floor designs can date a kitchen. If you have a little money, replace old appliances that don’t work as well (or are noisy), and consider working on the cabinets or replacing them.

And ... Don't Forget the Bathrooms

Don’t forget the bathrooms. Improvements in the ceramic alone can improve a bathroom. If you can afford the tile and fixtures as well, you can expect to recoup 85% of your costs when you sell. Adding a bathroom is a little less of an advantage, but increases saleability.

Adding Space to Your Home

In fact, increasing space in general can add to the value of your home. Finishing off a bedroom in a basement or attic adds to your square footage, and finishing a basement in general may be a good idea. Always check your local property tax laws, however, to see if finishing 100% the basement will increase them.

But ... Forget the Pool

If you’re thinking of adding a pool to increase value, don’t—not only is it a pain to maintain, the homeowner’s insurance will likely be high due to the sharp increase in liability risks. If you are adding one for your own enjoyment, keep in mind that it may decrease saleability in the long run, and you will recoup nothing. If that’s okay, then by all means build the pool. If not, get a membership to your local YMCA and swim there.