While fears about the state of the subprime mortgage market have sent lenders into a frenzy, banks are still eager to sign up more consumers for home improvement loans. As banks and mortgage brokers seek to minimize risk in their portfolios, money managers prefer to sign home improvement loans with creditworthy borrowers.

Harvard University researchers who monitor home improvement values expect spending on projects like cabinet refacing, wiring upgrades, and replacement windows to remain steady over the next twelve months. Despite a soft housing market, experts say, lenders understand how increased home improvement values translate to bigger home equity at the end of a project. In addition, some homeowners hope to realize a return even before putting their houses on the market.

Energy Projects Drive Home Improvement Value
Faced with the prospect of staying in their homes for a little longer than they originally planned, some homeowners are using home improvement loans to radically change their month-to-month budgets. Instead of investing in flashy appliances and upgrades to "flip" their properties sooner, savvy consumers have invested in making their homes more energy efficient.

In one of the most extreme examples noted by the New York Times, one homeowner used a home improvement loan to fund the installation of fuel cell technology. This energy upgrade effectively converts the home into a net energy generator, leading to a home improvement value with an immediate payoff. Even if you don't intend to create your own power, you can still find a home improvement loan with an attractive interest rate to increase the value of your home while improving your quality of life.

Sources
New York Times
Wall Street Journal