In May, 2004, InsightExpress® polled more than 800 homeowners and asked respondents to indicate their attitudes and experiences with home equity loans and lines of credit, and to compare them with other customary lending products. One of the questions consumers answered referred to their reasons for obtaining a home equity loan or line of credit. We’ve listed the top four reasons below, along with some useful - and fun - information on each one.

38.1% of respondents indicated they would use the home equity funds to renovate or remodel their home. This is an excellent reason to obtain a home equity loan or line of credit, because you’re putting the money back into your home – thereby increasing its value.

According to REMODELING Magazine’s Cost vs. Value Report*, which compares the cost-to-construct for a variety of common remodeling projects with the added value they bring at resale, the top five projects that give the most bang for the buck are:

1. Minor kitchen remodel – With an average job cost of $15,273 and an average resale value of $14,195, you can expect to recoup approximately 92.9% on this project.
2. Siding Replacement – With an average job cost of $6,946 and an average resale value of $6,445, you can expect to recoup approximately 92.8% on this project.
3. Bathroom remodel (mid-range) – With an average job cost of $9,861 and an average resale value of $8,887, you can expect to recoup approximately 90.1% on this project.
4. Deck addition – With an average job cost of $6,917 and an average resale value of $6,000, you can expect to recoup approximately 86.7% on this project.
5. Bathroom addition (mid-range) – With an average job cost of $21,087 and an average resale value of $18,226, you can expect to recoup approximately 86.4% on this project.
6. The above figures do not take into consideration the possibility of tax savings; the interest on a home equity loan or line of credit may be tax deductible (consult your tax advisor).

Although these numbers are a good guideline, remember, many factors go into determining how much money you may recoup on any given remodeling project. Two things you should consider: 

• The cost of material and labor in your area. 
•  The value of your home and the home-value trends in your area. In most cases, it only makes sense to invest significant money in your home if you are bringing it up to par with other homes in the neighborhood or, in the case of a good housing market, increasing its value just slightly over the value of other homes.

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