You made some smart decisions about the housing market and now you’re sitting pretty in a house with some equity. It may be time to tackle a home project that will improve both resale value and your enjoyment of the house for as long as you live there. But how do you decide where to put your money? What home improvements will provide the biggest returns in terms of value and comfort? Here are some basic tips for deciding how to spend your home improvement dollars:



- For most people, their home is their single biggest investment. Protect and grow that investment by selecting improvements that will increase the home’s resale value. Real estate experts agree that kitchens and baths are at the top of the list of good home improvement investments.

- Even if you’re undertaking the home improvement primarily to boost your own enjoyment of your home, it’s important to consider resale value. Remember that potential buyers might not share your tastes and while it may be easy to paint over the bright orange walls of your sunroom, replacing loud tiles or fancy-shaped windows could be a much more expensive fix come resale time.

- Do your homework on financing options. A poor financing choice could mean you’ll be paying high interest on your home improvement long after the last workman has left your house. Consider a cash-out refinance which allows you to refinance your mortgage for more than you currently owe, leaving cash on the table for you to put towards your improvements. The interest rate on a cash-out refinance is usually lower than what you would get from a credit card.

Even if you don’t need to pull cash out, a refinance might still be a wise move. Homeowners who bought their houses a few years ago may be in a good position to refinance at a lower rate and free up more cash each month to put towards improving their investment and their lifestyle.