Plan your renovation using these 4 steps

What do you want to accomplish — and why? The purpose and scale of a renovation can affect how you'll want to proceed. Common goals for a renovation include:

• Getting your home ready to sell. Your moving plans will affect both your timeline and your budget. Don't underestimate either factor.
• Improving comfort or function while you stay in place. Cosmetic and comfort updates can give you more flexibility in timing and cost, and help make life more enjoyable every day.
• Repairing or replacing broken and inefficient systems. These updates can be the most urgent, and often the most expensive. They should take priority over any cosmetic updates.

What can you do yourself versus hiring a professional? Handling simple updates yourself could save a lot of money. But be realistic about the time and skill you have to complete these tasks so you don't find yourself in over your head — and budget. Plus, some improvements need to be made by an authorized contractor and may require permits and inspections. If you're going to hire someone, this is the time to look for recommendations.

If you plan to sell, be aware that while some upgrades may increase the sales price of the home, some may cost much more than you'll get back from a buyer. Do some research or talk to a real estate professional to see if particular improvements will really increase your profit.

If you plan to stay in the home, you'll have more opportunity to spread payments out over time. However, you may want to prioritize your renovation wish list so you don't max out your budget.

The most cost-effective way to pay for renovations is cash, since you don't have to pay interest, but that's not always possible. You'll also want to be sure you have money in savings for unexpected needs.

Another option, if you have equity in your home, is a home equity line of credit (HELOC). Benefits include:

• Lower interest rates. HELOC rates are often lower than personal loans and other types of financing.
• More flexibility. Access funds as you need them during the 10-year draw period. Plus, if you repay funds, you can access them again.
• Ease of access. Most lenders offer multiple ways to access funds, including online transfers to checking or savings, by check, or at a financial center.

A Bank of America lending specialist can help you decide how much you can borrow, compare rates and estimate monthly payments.

Keep in mind that if you plan to sell your home soon, you'll need to get enough from the sale to pay off any loans that draw on your home's equity. The more you borrow, the less cash you'll end up with after the sale, which means you'll have less for a down payment on your next home.