The housing market continues to cool, slowly trending from a white-hot seller's market to a more neutral market. However, home values remain high across the United States, especially in Oregon.
On the surface, this is great news for existing homeowners (who can argue with extra equity?). But if you also factor in high mortgage interest rates refusing to budge, and you’re a homeowner stretched for space, this also means purchasing a new home may be out of the question. Frankly, it's not a great time to buy or sell a home.
While current prices can push upgrading to a new home out of reach (despite the cooling, the median sales price is still over $700,000 in Bend and close to $500,000 in Eugene), it opens the doors to upgrading in place with a home equity line of credit (HELOC). Simply put, a HELOC lets you borrow against the value of your home at a favorable rate.
“It continues to be a great time to take advantage of home values with a HELOC,” said Cheryl Cauthon, Branch Manager of SELCO Community Credit Union’s Old Mill and West Bend branches. “Whether you have a fixer-upper or could use an extra room to call your own, making use of your added equity can bring the advantages of a new home to you.”
And you won’t have to pack a single box.
Space out the upgrades
A good rule of thumb for HELOCs is to take the maximum you’re approved for but only use what you need. A typical draw period of a HELOC is 5–15 years, so you can easily space out your projects into affordable gigs. From big jobs (like boosting your living space or revamping your kitchen) to smaller ones (such as touching up the landscaping or finally putting in that heated bathroom floor), a line of credit is ideal for tackling one project at a time. And payments are only due when you have a balance.
Max out the value
If you see yourself in your house long-term, your goals may differ from those of a homeowner who still wants to upgrade when the market cools (or downsize when kids move out). Personal touches that make a house feel like home are priceless—even better if they give you some extra elbow room.
But there are plenty of renovations that make financial sense in the short- and long-term. A minor kitchen upgrade can offer a return on investment of over 80%, whereas adding that deck you always wanted can net an even greater return at nearly 83%. And while a project like replacing windows sees a slightly lower return at around 74%, it’s hard to put a price on comfort (plus, the remaining balance could be offset by lower heating and cooling bills over time).
Whether you need more space or are ready for a refresh, a HELOC could be the route to take (no change of address form required). To learn more about a SELCO HELOC, schedule an appointment today.