Have you set aside any new home improvements or repairs as of late? You’re not alone.
More than six in 10 new homeowners are delaying necessary repairs since purchasing their home citing a lack of available capital or cash to cover the costs, according to a survey released.
The survey of 2,000 American homeowners, commissioned by Figure between Jan. 11 and Jan. 13, was conducted by market research company OnePoll, according to a news release.
The survey found that 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 the equity in their homes to finance repairs and upgrades.
“While many Americans bought homes during the pandemic, and are now discovering that renovations and upgrades are needed to turn their investments into their dream homes. Others remained in their existing homes during the pandemic, but now realize they need to make changes and enhancements to enjoy their homes more or modify their space to meet a more permanent flexible work arrangement. The survey demonstrates that consumers do not know they can tap the equity in their home to make necessary upgrades or repairs, and often at a much more attractive rate than other options like credit cards or other unsecured loans,” said Jackie Frommer, COO, Figure Lending in the news release. “Home price appreciation is at an all-time high, giving homeowners the ability to borrow money using a HELOC at a very favorable cost. The traditional use of a HELOC is for home renovations and upgrades, but what many people don’t realize is that a HELOC can also be used to manage your finances through debt consolidation, or for other large expenses and life events like sending children to college, paying for a wedding or taking a dream vacation. We are excited to be able to help Americans with the financing needed to realize all their biggest goals, including creating a warm and inviting home, educating children, and celebrating milestones.”
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 homes. The recent rise of inflation is at the same time making the cost of all large expenditures more expensive. Home equity provides the perfect solution to offset these rising costs by providing a more attractive and flexible financing alternative for homeowners.
The figure has seen an 83% increase in volume for home equity lines of credit in the past year. In the immediate months before 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.
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, the news release added.