MCLEAN, Va., Oct 26, 2005 /PRNewswire-FirstCall via COMTEX News Network/ -- While home sales in the Hartford continue to increase, a new survey by leading financial services provider Capital One Financial (NYSE: COF) suggests that some area residents are choosing to stay in their homes and renovate rather than move.

According to the survey by Capital One Home Loans, the home lending division at Capital One, nearly 65 percent (64.9) of Hartford-area homeowners have made renovations to their homes in the last two years. Fifty-six percent (56.1) of those homeowners reported that they made the changes because they plan to live in their house for an extended period of time and want to make it a space they enjoy. Only 19.7 percent said the renovations were done to improve the home's value for future sale.

The cost of these improvements can be substantial, with the majority of the residents surveyed (61.9 percent) reportedly spending between $5,000 and $30,000 and some spending $60,000 or more. Yet 21.8 percent of the area's homeowners felt they had little to no knowledge about the lending options available to them for their renovation.

"Deciding to renovate rather than move can be a very cost-effective choice in today's market but it can still be expensive. The good news is that the money homeowners spend on remodeling is being reinvested in the house and, with certain types of financing, the interest you pay can even be tax deductible," said Pam Girardo at Capital One. "It's important that homeowners explore their financing options to find the best way to maximize the return on their investment."

While 26.4 percent of the area's residents are using lending options such as home equity products, many consumers are not aware of the options available to them.

"Home equity loans allow you to take advantage of the equity you have in your home without having to sell. Tapping into your home's equity is an inexpensive credit option that is often very well-suited to home improvement projects," said Girardo.

Girardo added that many homeowners don't realize that home equity products can be used for much more than home renovation. Whether it's setting aside funds for education/tuition, having a source for emergency funds or debt- consolidation, it's important that homeowners learn about the options available from financial experts.

Which is the best financing option for you?

The two most common home equity products used by homeowners today include Home Equity Lines of Credit (HELOC) and Home Equity Loans. Capital One's home lending experts, experienced loan consultants who assist customers in choosing the best products to suit their needs, offer a few basic tips for homeowners:

• Determine how much you would like to borrow. Think through your plans (get estimates from contractors, talk to the experts at your local home improvement store) and determine how much you plan to spend. You might also review your existing debt and consider consolidating other higher- interest debt into a home equity loan.

• Think about how you'll be using the money. If you are planning a single project with a fixed cost which needs to be paid upon completion of the project (like adding a deck or remodeling a kitchen), a home equity loan might be the best option for you. However, if you are unsure about the final cost, how long the project will take or if you anticipate needing additional funds for another purpose (like tuition or recurring medical expenses), you might be better off opting for a HELOC.

• Shop around for the best rates. Understand how the interest is calculated on each loan type and find the best rate and the most favorable terms. Interest on a home equity loan is charged as a fixed rate and the principal and interest payment remains the same over the life of the loan. For a HELOC, the interest rate is variable and payments vary monthly with the rate and depend upon how much you've borrowed against your credit line.

• Plan your budget ahead of time. Make sure that the payments on the loan fit within your budget and that taking out a loan will not overburden you.

Finally, experts recommend that you try to maintain at least 20% equity in your home. Think of it as a financial safety measure that will ensure that you have access to an important source of funds in case of an emergency.

For more information on home equity lending options, consumers can visit http://www.capitalonehomeloans.com.

Survey Methodology

For the homeowner survey, Braun Research, Inc. was engaged to conduct 1801 interviews with homeowners across the United States. The interviews took place in the following markets: Hartford, CT (301 interviews), Sacramento, CA (300 interviews), Orlando, FL (300 interviews), Minneapolis, MN (300 interviews), Tucson, AZ (300 interviews), and Fort Myers, FL (300 interviews). The surveys were conducted by telephone from September 28 through October 2nd, 2005. The margin of error for the interviews is plus or minus 5.66 percentage points. Interviews were monitored at random. Interviews were conducted within the individual markets using an RDD (random-digit dial) sample. All interviews were conducted using a computer assisted telephone interviewing system. Statistical weights were designed from current year population estimates. These weights were based on the statistical database facilities of Claritas, the leading analytical database provider of Census based statistical demographic data.

About Capital One

Headquartered in McLean, Virginia, Capital One Financial Corporation (http://www.capitalone.com) is a bank holding company whose principal subsidiaries, Capital One Bank, Capital One, F.S.B. and Capital One Auto Finance, Inc. offer a variety of consumer lending products. Capital One's subsidiaries collectively had 48.9 million accounts and $83.0 billion in managed loans outstanding as of June 30, 2005. Capital One is a Fortune 500 company and, through its subsidiaries, is one of the largest providers of MasterCard and Visa credit cards in the world. Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 500 index.

Capital One Home Loans offers a variety of financing tools, including mortgages for refinancing and new home purchases, home equity lines of credit, home equity loans and options for debt consolidation.

SOURCE Capital One Financial Corporation

Alison Athay of APCO Worldwide, +1-206-239-0140, or aathay@apcoworldwide.com, for Capital One Financial Corporation