Should you use savings, a HELOC, or pay-at-close to fund home improvements before selling?

How do you fund pre-sale home improvements?

If you're considering selling your home, you've probably already heard how much pre-sale prep matters.

You may even be working with an agent, which means you should've gotten their list of recommendations on the prep work they recommend to maximize your home sale. They might've even told you (depending on your market) that you'll want to get your home into "move-in ready" condition, because that's what most buyers want.

Simple touches like fresh paint, a landscaped yard, or staging can help your home make a stronger first impression, feel like it's well-maintained, and appeal to more buyers. But many homeowners are selling and buying a home at the same time, and are already managing an immense amount of stress and transactions at one time.

Naturally, that's when one question might come up:

If getting my home move-in ready helps it sell, what's the best way to fund the work?

After working with thousands of homeowners, we've found there isn't one answer. Every seller's financial situation is different, and everyone has a different idea of risk and investment. Here's a look at some of the most common options.

Option 1: Use your savings

Some homeowners simply pay for prep out of pocket.

This can be a good option if you have extra cash set aside and feel comfortable using it. The advantage is that you won't take on any debt or pay interest.

However, many homeowners prefer to keep their savings available for other expenses that come with a move, such as a down payment on their next home or other large investments.

For some sellers, tying up thousands of dollars in home improvements can be inconvenience or simply out of reach, especially if they're buying a home simultaneously.

And for others, their cash might simply not be liquid, and moving investments around can be cumbersome (and not to mention, potentially mean a taxable event, or loss of future gains).

Option 2: Use a credit card

Credit cards can be convenient for smaller projects and emergency repairs.

But when larger expenses start adding up, high interest rates and monthly payments can create more pressure at a time when many homeowners are handling one of the most stressful times of their lives. Plus, if you're watching your credit, you might not like another ding on your credit with a hard credit pull.

Using a credit card might not be the best fit for larger pre-listing projects that take several weeks or months to complete, but it could be right for you in the case of a few cosmetic touch-ups and listing quickly.

Option 3: Use a HELOC

A home equity line of credit, or HELOC, allows homeowners to borrow against the equity they've built in their home.

HELOCs can offer lower interest rates than credit cards, but there are other considerations:

• Monthly payments while your home is on the market

• A hard credit pull

• Using your home as collateral (a secured loan that places a lien on your home)

For homeowners who have significant equity and have big-ticket fixes to make (think: renovation or a major strategic upgrade), a HELOC can be the option that makes the most sense. Given that this is a secured loan, think of this as seriously as you would a mortgage and be sure to apply when you're ready to accept an offer.

For sellers who want a simpler way to prepare their home without taking on another monthly payment or use their home as collateral, it may not always be the most convenient solution.

Option 4: Use pay-at-close

A pay-at-close loan is exactly what it sounds like: you pay back the funds you used when the home closes.*

Through Notable, eligible homeowners can access up to $50,000 to prep their homes before selling. Similar to a HELOC, a pay-at-close loan also taps into your available equity, but unlike a HELOC, it's an unsecured loan (no lien) and with no credit impact when applying or accessing funds. With pay-at-close, you don't have monthly payments while your home is on the market (you pay everything when the home closes).*

For many sellers, this can be a more convenient and flexible choice for funding pre-sale home prep while preserving cash and savings for their move.

What's right for you?

>> Download a one-page comparison of these options

The right funding option depends on your home-selling goals, timeline, and financial situation. If you're in a hot real estate market and need just a touch of cosmetic fixes before listing quickly, you could opt to cover those costs with savings or a credit card.

The most important things that will help drive your decision are:

• Knowing your local market and how your home compares to similar homes

• Communicating the outcomes you want with your real estate agent

• Thinking about pre-sale home prep as an investment rather than an expense

A thoughtful plan with your real estate agent can help you make smart investments, preserve your cash, and feel more confident as you get ready to sell your home.

Your next read: The surprising costs Notable can cover

*Interest and fees apply. Loan funds, interest and fees are due upon loan acceleration, twelve months after origination, client’s termination of the listing agreement, or the date on which Notable otherwise suspends the loan for any reasons stated in the loan agreement, whichever occurs sooner. Subject to the terms and conditions of the loan agreement.