Homeownership is a powerful investment tool. The more value you add to your home, the more you'll make back when it’s time to sell. If you’re a homeowner with little cash but a lot of equity, then a home equity line may be the financial tool you need to perform home remodels and repairs, which ultimately can increase your home’s value.

Keep in mind that not all home equity lines are created equal. Knowing what one is, how it can help you leverage your home’s equity, and how to decide which one is right for you is important in your decision-making. This article discusses using a home equity line to add value to your home, explains the benefits of a home equity line, and describes the application process.

How to Use a Home Equity Line to Add Value

Here's what you can do to add value to your home with a home equity line:

  1. Research which home improvement projects add the most value to your home
  2. Estimate your expenses
  3. Choose the project which will add the most value within your budget

You'll get the greatest return on your investment by choosing your project wisely and by keeping your costs low. Not all improvement projects are valued equally by home buyers. To get the biggest boost in home value, choose a project that buyers look for when they're purchasing a property. For example:

  • Low-to-mid-range kitchen remodel Large kitchens with lots of storage and stylish counters made from durable material tend to show well. But, be careful not to overspend (which is easy to do during a kitchen remodel). Buyers may not want to pay extra for gourmet appliances, so avoid high-end charges.
  • Siding replacement Siding can last for decades, but in time it will start to become faded and dull. Replacing your siding can improve your home's curb appeal while at the same time protect your home from rain, snow, and harsh UV rays.
  • Bathroom remodel Like kitchen remodels, bathroom remodels deliver a good return on investment when they're kept to a reasonable cost. Walk-in showers, hand-held shower heads and durable bathroom counters that are easy to clean are popular bathroom features.

What Is a Home Equity Line?

A home equity line allows you to borrow against the equity you have accumulated in your home. Factors considered to determine the amount of loan you qualify for can include the current value of your home, the amount of equity you have in your home, your income, and your credit rating.

The benefits of a home equity line include:

  • Interest rates that are typically much lower than personal loans or credit cards
  • Funds that can be used for nearly any purpose
  • Low or no closing costs

Loans against your home’s equity are useful for a variety of expenses, including home improvements, home repairs, or student tuition. If you’re a homeowner trying to add value to your home, using your funds for a home improvement project can boost your home's resale value. These loans can be also used for debt consolidation to reduce your overall interest payment and streamline your bills.

How is Figure’s Home Equity Line Different?

Most home equity lines have variable rates and loan amounts that you draw down like a credit card. Figure's home equity line is different. You'll get a lump sum payout at a fixed rate, so you'll know how much money you'll be paying every month until the loan is fully paid back.

The application process is easy, secure, fast, and transparent. For most homeowners, applications take as little as five minutes online. Once you’re approved, funding can happen in as little as five days2. Figure offers loans between $15,000 and $150,000.

When to Use a Home Equity Line from Figure

A Figure home equity line is an excellent loan if you’re seeking predictability and stability. Whereas other home equity lines have variable interest rates that are difficult to predict, Figure’s home equity line is repaid on a set schedule with a fixed interest rate1.

Fill Out an Online Application

A home equity line may make it possible to begin a home improvement project to get the most out of your investment. Check out our home equity line process. Start by completing our online application today.

1 The Figure Home Equity Line is an open-end product where the full loan amount (minus the origination fee) will be 100% drawn at the time of origination. The initial amount funded at origination will be based on a fixed rate; however, this product contains an additional draw feature. As the borrower repays the balance on the line, the borrower may make additional draws during the draw period. If the borrower elects to make an additional draw, the interest rate for that draw will be set as of the date of the draw and will be based on an Index, which is the Prime Rate published in the Wall Street Journal for the calendar month preceding the date of the additional draw, plus a fixed margin. Accordingly, the fixed rate for any additional draw may be higher than the fixed rate for the initial draw.

2 Five business day funding timeline assumes closing the loan with our remote online notary. Funding timelines may be longer for loans secured by properties located in counties that do not permit recording of e-signatures or that otherwise require an in-person closing.