UnderConstruction.com

As you research the costs of remodeling your home, one thing becomes very clear-undertaking a major home improvement project is expensive. Even if you act as your own general contractor, the costs of permits, materials, insurance, and subcontracting add up quickly.

Some people handle this obstacle in small steps by saving what they think they'll need before beginning individual phases of their home improvement project. Most people, however, get cash up front by taking out a home improvement loan.

The benefit of securing a loan for the full amount of your remodel is that you are able to lock in costs and complete the work before prices rise.

A home equity loan really is the best way to fund your remodeling project. True, you'll pay interest on the loan, raising the final cost of the undertaking, but you save money by being able to pay cash for all purchases; interest on a home construction loan is much lower than on credit cards.

Also, because the home improvements you make increase the value of the property, you actually benefit by the increased equity in your home.

Banks and credit unions are the most common places to find home improvement financing at good rates. In addition to the usual paperwork, one of the steps in applying for home improvement financing is an appraisal of the value of your home.

Since home values have increased in just about every part of the country in the last few years, chances are good that your house is worth more now than when you bought it.

That equity increases the amount of money you can get through a home construction loan.

You can boost your appraisal value-and therefore your equity-by making some small improvements before your house is appraised for your loan.

You might be thinking, "wait a minute-how can I afford to make home improvements before I get the loan?" We're not talking about major improvements here, just the little things you can do to improve the look of your home before appraisal.

Take a look at the outside of your home. One of the things your house will be appraised for is "curb appeal." Sanding and repainting trim will take you a weekend, but put money in your pocket when the loan closes.

This kind of "sweat equity," results in a higher amount you can get in home improvement financing.