How to Use a Home Equity Loan to Finance Your Landscaping Project

Landscaping is an art form — it’s more than just planting a tree here and there. Using a home equity loan to finance your intricate landscaping project is one way to enhance the beauty of your property. But is borrowing against the equity in your home a sensible financial choice?

Depending on the scale of your landscaping project, the whole thing can get rather expensive, especially when you’re hiring a professional team to do all the work. Your best bet is to plan a project based on money you already have. But if you want to get the work done sooner rather than later, and need a little extra money to do it right, your Thompson Kane mortgage lender can help you determine if a home equity loan makes sense for you.

How to Finance Landscaping Projects

How to get started: Secure a home equity loan based on how much of your property you own, versus what you still owe on it.

Home equity is the value of ownership in a home, calculated as the property’s market value minus outstanding mortgage debt.

Like personal bank loans, home equity loans have terms and interest rates. Even if you need to improve your personal credit, the equity in your house may provide enough collateral for a loan. Some lenders may require a formal review of home improvement plans before they’ll approve a home equity loan.

What’s A Home Equity Line of Credit (HELOC)?

A Home Equity Line of Credit (HELOC) differs from fixed loan amounts. HELOC is a flexible loan that lets you access funds as needed–up to a certain amount. HELOCs provide you with a line of revolving credit to use for large expenses–like landscaping design–or to consolidate higher-interest debt on credit cards. HELOC loans usually have lower interest rates and must be repaid (in increments or in full) within a specified period.

HELOC loans might be beneficial for your landscaping project because costs can be very unpredictable. For example, the cost of a privacy fence can vary widely based on what type of materials are used, and borrowing from a home line of credit lets you use the exact amount of money you need for each segment of your project.

HELOC loan lenders will look at your credit score and history, monthly income, debts, and employment history.

Is It Worth It?

Does it pay to spend all that money on landscaping? After all, it’s just a bunch of trees, right? Well, that depends on the overall design and its ultimate return on investment (ROI). Having well-maintained, sculpted landscaping is a bonus when you’re getting ready to sell your home.

Investing in an outside remodel — complete with sculpted landscaping and hardscapes — might bring a significant return, especially when you sell your house. Expert opinions vary on the actual ROI, but the American Society of Landscape Architects claims that professional landscaping and design can increase a home’s resale value by up to 20%.

Well-placed trees and shrubs block excessive sun and heat from the house, leading to lower electricity bills. Same thing in the winter, where snow and strong winds can push your home’s furnace to work harder. Strong trees and Wisconsin winters go together! Large trees, plants, and bushes also help to muffle loud outdoor sounds like lawnmowers, traffic, barking dogs, and happy-but-noisy kids.

Good Front and Backyard Investments

Once you’ve finalized the financing arrangement that works best for you, plan backyard investments for your own enjoyment, as well as a good ROI when it’s time to put your property on the market. Consider these hardscaping options:

● Cement/brick patio or a solid wooden deck using pressure-treated planks
● Underground sprinkler system to keep your lawn and flower beds watered
● Paved walkway from the driveway to the front door
● Brick barbecue and/or outdoor kitchen
● Wooden gazebo or pergola
● Outdoor security lighting
● Xeriscaping

The equity in your house can pay for the perfect landscaping. Perfect landscaping can help you get the best payoff for your property.

Teri Silver is a journalist and outdoor enthusiast. She and her husband live on 5 acres with a vast lawn, three gardens, a farm, a pond, many trees, and a lot of yard work! The best parts of the year are summer and fall when home-grown veggies are on the dinner table.