Wells Fargo Survey Reveals Homeowners Invest in Their Homes for Added Comfort; Enhancing Family's Quality of Life is Primary Goal of Home Improvements for Many Americans.
"Creating a comfortable and secure environment at home is becoming more of a priority for consumers," says Cara Heiden, division president, National Consumer and Institutional Lending, Wells Fargo Home Mortgage. "Whether it's a home buyer purchasing a newly constructed or existing property or a homeowner investing in a property they have owned for several years, we are seeing more and more people center their lives around their home. With the proper planning and education on the new home financing products available, homeowners can make these improvements."
Many homeowners seem to be focusing on revitalizing and personalizing their homes. According to the survey, half of all homeowners (51%) said that they made interior decorating home improvements in the past year or will make these types of improvements in the coming year. This is a significantly higher than those who have or plan to landscape (39%), take on mandatory maintenance projects, such as plumbing (38%), or exterior decorating (29%).
Findings also showed that homeowners with home equity accounts are significantly more likely to undertake larger remodeling projects such as adding a new kitchen or a new room. In contrast, respondents without home equity financing were more likely to undertake smaller projects such as interior decorating, landscaping and exterior decorating. Twenty-nine percent of the homeowners surveyed who don't have a home equity loan or line of credit will spend more than $10,000 on home improvement projects, a figure that jumps to 49 percent for those who have home equity financing, according to the Wells Fargo survey.
"Those with access to home equity financing have the means to make these home improvements with what may be the most economical form of borrowing that's available," says Heiden. "As a side benefit, the increasing value of homes compared to other investments make home improvements well worthwhile."
One innovative product that meets the needs of homeowners interested in making enhancements to a new or existing home is Wells Fargo's Home Asset Management(SM) Account.(a) With a one-time processing and approval, this product offers a combined first mortgage and home equity line of credit in an all-inclusive package. The Home Asset Management Account enables customers to both finance their home and conveniently access their equity as needed. As payments are made toward the first mortgage principal balance and as the home's estimated value increases, the amount of a customer's home equity line of credit and the available balance may be increased without the need to reapply, which allows ready access to financing for planned and unplanned expenses.
"With a Home Asset Management Account, customers can manage their home as their most important asset," added Heiden. "Homebuyers can now plan for and finance improvements without liquidating other investments or dipping into necessary savings. This type of product gives homeowners a flexible tool to control the use of their home equity to achieve their goals whether they are enhancing their home life or making improvements for financial gain."
Homeowners can use the product for both purchase and refinance transactions on single-family, owner-occupied primary residences or second homes, and it is available on a variety of fixed-rate and adjustable-rate mortgages. The account also features informative reports that homeowners receive to help track account and estimated home value activity. With the Home Asset Management Account, customers have the option to convert all or a portion of the outstanding balance of their home equity line of credit during the draw period, into a fixed-rate advance and use it to finance expenses at a lower rate than they may get with other types of credit. Plus, interest paid on the home equity account may be tax-deductible.(b)
About the survey
To further explore the home equity landscape among consumers, ICR/International Communications Research, Media, PA, conducted a web-based study on behalf of Wells Fargo & Company. Reflected in this research is the participation of 1,307 homeowners. Furthermore, participants include both men, and women who are the primary or joint decision makers in their household. The margin of error for a sample size of 1,307 respondents is +/-2.7%. This means that for any given percentage within this report, the true percentage range is within +/-2.7% of that actually reported. Interviews were completed during the second quarter of 2004.
About Wells Fargo
Wells Fargo's Home & Consumer Finance Group is a business division of Wells Fargo Bank, N.A. The division includes Wells Fargo Home Mortgage, one of the nation's leading home mortgage lenders and servicers; the Consumer Credit Group, a leading provider of home equity and personal credit accounts; Corporate Trust Services, which provides fiduciary and agency products to corporations, government entities, banks and securities firms. Wells Fargo Bank, N.A. and Wells Fargo Financial, Inc., a leading provider of credit products to both consumers and commercial businesses, are part of Wells Fargo & Company.
(a) The Home Asset Management(SM) Account is not available in Texas.
(b) Consumers should consult their tax advisors for specifics as restrictions may apply.
(C) 2004 Wells Fargo Bank, N.A. All right reserved. Equal Housing Lender.
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|Date:||Sep 9, 2004|
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