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Baseball season has returned, the school year is winding down, and for many, now is the time to consider upgrading to a new home. Whether you’re in the military and about to PCS, or you’re a civilian just looking to upgrade, there’s a lot to consider.

The toughest question this year may not be “can I afford a new place to live?” – but rather, “are there new homes available where I want to live?”

Home values are climbing and many Americans are considering a move – but are facing a shortage of available homes. So, rather than struggle to find a place or settle for a home you don’t love, some homeowners are using the equity they’ve earned in their current home and making some upgrades.

According to a recent report by the Federal Reserve Bank of Kansas City, home construction per household remains near the lowest level in 60 years of record-keeping.

So, it might be time to do a personal assessment. Would you be better off moving to a new home, or investing in home improvements to make your current home more like your dream home?

If a home improvement project sounds like an option for you, think about looking into a home equity loan or a home equity line of credit. Home equity is the difference between your home’s value and the remaining balance on your mortgage.

What are the different kinds of equity loans?

A home equity loan offers you a specific sum of money and gives you a set time to repay the loan. The repayment can be anywhere from 5 to 15 years. Some lenders offer up to 20 years to repay an equity loan. And because these equity loans feature a fixed rate for the life of the loan, you’ll have predictable monthly payments.

A home equity line of credit (HELOC) lets you access money as needed, up to a maximum credit limit. It’s like using the available credit on your credit card. HELOCs are a good option if you expect to have ongoing expenses, or just want an emergency fund for peace of mind.

How much you can borrow against your home will depend on your financial institution. For example, at Navy Federal, a homeowner can borrow up to 100 percent of their home’s equity with a Fixed Equity Loan, and up to 95 percent with a HELOC.

The first step before you borrow with either of these loans is understanding how much equity your home currently has. If you’re looking at a home improvement project with a set budget, like a kitchen renovation, you’ll likely want to consider a home equity loan. It features a fixed interest rate, and you’ll know your payment will remain steady for the entire term of the loan. But if you’re looking at a longer-term project, like a remodel, you may want to think about a HELOC. It allows you to borrow what you need, when you need it.

Not every situation is the same, though. By talking with a lender you can trust, you can get a better idea of how each product could work for you. The best part is, you’ll be one step closer to making your current home your dream home!

This article is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.