3 Ways to Pay for Home Improvements This Summer
We talked to four Zions Bankers who are immersed in home improvement projects to find out how they’re working them into their budget.
It’s summer and for most homeowners, warm weather means it’s time to accomplish as many outdoor projects as possible before winter arrives. U.S. News & World Report says summer is the best time of year to install a fence, repair the roof or build an addition on your home.
While there’s often no end to the list of improvements you could make to your home, the money you have to pay for projects is typically not unlimited.
We talked to four Zions Bankers who are immersed in home improvement projects to find out how they’re working them into their budget. Here’s what they said.
Home improvement project funding source #1: Cash
Executive Banking Relationship Manager John Steele is pretty handy with a hammer and he’s thrifty, too. That’s why he’s using cash to pay for improvements to the home that he recently purchased.
It helps that his fiancée’s family members all work in construction and are willing to jump in and assist with projects, including installing a new fence, sprinklers, garage door, wiring, lights and hardwood floors.
“It’s like I hire people but it’s friends and family and we do it together,” says Steele, an Executive Banking relationship manager based in Salt Lake City.
Home improvement project funding source #2: Home Equity Credit Line
Thompson’s two-car, 1979 garage was bursting at the seams with dirt bikes and mountain bikes, but it was the purchase of a new riding lawnmower that pushed them over the edge.
Simply put, a two-car garage for an active family of five “doesn’t work if you want to park your cars in there, too,” says Thompson, a Business Banking relationship manager based at the Twin Falls Eastland Branch in Idaho.
The Thompsons used a Zions Bank home equity credit line to fund the purchase of a custom 22’ x 14’ shed with upgrades including a work bench, dormer and solar lights. “The shed will help increase the value of our home but has also improved the functionality of our garage,” she says.
Thompson says using the home equity credit line makes such a large purchase affordable, because they can pay for it in installments over a 10-year period.
Home improvement project funding source #3: One-Time Close Construction Loan
Marie Martinez and Anthony Graham are both involved in major overhauls of their homes.
Martinez says she and her husband were initially looking to buy a new home, but after shopping around decided to just stay put and renovate. “I didn’t want to spend $400,000,” she says. “We decided to just remodel this one and stay here till we retire.”
The timing of the project was influenced by interest rates and by the warmer summer weather, according to Martinez, an Executive Banking relationship manager in Farmington, Utah.
To pay for the improvements — which include restructuring the layout, redoing trim and walls, moving the utility room and adding sprinklers and fencing — Martinez applied for a Zions Bank One-Time Close Construction Loan.
While these loans are most frequently used for new home construction, they can also be used to fund a remodel. Here’s how it works: Renovation plans are submitted to the bank’s appraiser who determines the anticipated value of the home after the improvements are made. Zions Bank approves the loan amount based on the appraised value and will typically lend up to 95 percent of that amount for loans within the conforming limit. The borrower locks in their interest rate before the remodel begins.
Anthony Graham is considering using either a one-time close construction loan or a home equity credit line to fund his remodel because paying cash proved difficult as the scope of the project has grown. “You start one thing and then you find out that the electrical wasn’t done right, or the piping is going to burst or there’s been a recall,” says Graham, a Zions Private Mortgage Banker in St. George, Utah. “It’s just part of the deal.”
Graham is about halfway done with the remodel, which includes new bathrooms, laundry room, flooring, landscaping and repouring the pool.
With so much do to and so many potential problems, doesn’t it just make more sense to build a brand-new house?
“We picked up the house for a phenomenal deal,” Graham explains. “The cost to build has become really expensive. It’s better to take an existing home and do a remodel on it. We like where our neighborhood is, our church location, and our kids’ school, we just couldn’t find the right lot. So we decided to take existing home and make it the right place.”
Making your own summer project bucket list? Visit a Zions Bank branch near you to find out whether a home equity credit line or one-time close construction loan can help make it more financially manageable.
Loans are subject to credit approval. Terms and conditions apply. See a banker for details. Equal Housing Lender. NMLS #467014.
Nicola McIntosh is Social Media manager for Zions Bank.