During the frenetic housing market of the past two years, many buyers settled on a property in less-than-perfect condition in order to secure a home. Others decided to stay put and focused on updating their current home to better meet their needs and lifestyles. Either way, home renovations are on the horizon for many.
However, according to a recent survey, more than six in 10 new homeowners are delaying necessary repairs since purchasing their home, citing lack of available capital or cash to cover the costs.Â
According to a recent survey of 2,000 homeowners commissioned by Figure Lending and conducted by market research company OnePoll, 57% of homeowners intended to use savings for home repairs and upgrades; 68% of those surveyed would consider instead using a home equity line of credit (HELOC), but 61% said they don’t know how to tap equity in their homes to finance repairs and upgrades. With home equity at an all-time high for most, many homeowners have the option of borrowing money using a HELOC at favorable costs.Â
COVID has driven a huge increase in home sales in the past two years. Rising home prices and low interest rates present an opportunity for homeowners to tap the equity in their home. The recent rise of inflation is at the same time making the cost of all large expenditures more expensive. A home equity loan can provide the perfect solution to offset these rising costs by providing a more attractive and flexible financing alternative for homeowners. Â Â Â Â
Figure has seen an 83% increase in volume for home equity lines of credit in the past year. In the immediate months prior to the pandemic in 2020, a majority of consumers reported using their HELOC funds for debt consolidation (63%) compared to 26% for home improvements. In the last year, 40% of consumers reported using their HELOC for home improvements compared to 42% for debt consolidation.Â
In the survey conducted by OnePoll, seven in 10 homeowners say they would have reconsidered purchasing a home if they knew about all the unexpected costs that come with it. Most of those who purchased homes with low-interest rates during the last couple of years said they wouldn’t have been able to afford them if that wasn’t the case.
