If you are looking to make changes to your home that are more cosmetic than needed, be careful. It is possible to over improve a home especially in this market. Improvements can add value to a home, but with the current market you may not recoup what you put into it.

If home values are going up each year, you may get the added value by adding the improvements. If home values remain the same or go a little lower, then the improvements may price you above the market and you may not get it back.

The first thing we need to consider is what kind of modifications or alterations you will be making to your home because certain changes don't increase the home value. In this economy will those changes necessarily be able you to ask more when you put the house on the market? Will these changes be appealing to a home buyer? It may be 2 years until the housing sector settles and home prices begin to rise again. If you can have a local real estate agent do a market evaluation with comps now it may give some idea of how much your home will increase in value. If it only increases at 3 to 5 % is the amount of what you spend going to be recooperated when you sell? Also remember that the home you will be purchasing will be going through the same market changes and thus is it better to keep that $20,000 for what you may need in a new house? Two years goes by very quickly. Finally, unless you can prove income, have equity in the property and have other asset money a HELOC is not really possible right now and you will not be able to get a second. If you max out your credit cards will you have room for emergencies?

The terms and conditions of the "loan" and "line" will differ. The line will allow you to use what you want. For example: if your project costs $17,275.22, you can use exactly that amount and only pay interest on the portion borrowed. Lines of credit are also typically faster and easier to set up, and typically only require a minimal interest payment every month.

Robert Greenblatt
Keller Williams