It’s no mistake that home improvement is booming. Home improvement companies Lowe’s (LOW:NYSE) and Home Depot (HD:NYSE) have had a good 2002 and are projecting strong growth for the next couple of years. Banks are lending money at a rate of the prime rate (4.75 percent) plus a point for home equity loans and mortgages, into which you can add your expected renovation costs, are running under 6 percent for a 30-year mortgage.

According to the latest survey from Remodeling magazine, homeowners will get the best resale value through minor and major kitchen improvements and adding a bathroom. In the Internet age, home offices are ascendant.

Paul Rocheleau, owner of Absolute Kitchen and Bath in Bend recommends putting more money into a kitchen remodel if you don’t have enough to do both. Replace cabinets and counter tops in the bathroom, he said, and spend the rest on the kitchen.

”Usually you’ll get back about 20 percent more than your investment in remodeling your kitchen,” said Rocheleau, who has been in the remodeling business for 30 years. Remodeling magazine estimates the return at 102 percent.

”Besides, when people are looking to buy homes, they always think it will cost less to remodel a bathroom. But it’s actually more expensive per square foot,” Rocheleau added.z

Rocheleau says that people with lower end homes will not get back their investment from lavish improvements. You don’t want to scare off potential buyers because you’ve added in the cost of granite counters and top quality appliances.

Many people are trending toward lighter color cabinets and stainless steel appliances. Roll-out shelves open up bottom shelves that were otherwise useless, Rocheleau said.

Tom and Marcia Houston of Tillicum Village in Bend were recently considering moving to a different house in Bend. They had lived in their home for 27 years and were looking for a new place with a newer kitchen.

After scanning the market, they found they would have to remodel kitchens in the homes in their price range anyway. Instead they refinanced their home at a lower rate and rolled into their new mortgage the cost of renovation.

”We know that the kitchen would have kept the price of our resale down quite a bit, said Marcia Houston who spent about $25,00. ”If we wanted to sell it, we’d get that money back.”

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The Houstons put in new hickory cabinets, an island, stainless steel appliances, acrylic counter tops and a garden widow above the sink. ”It was much less expensive to do what we did,” said Houston. ”People who come in and see it think we put on an addition.”

Costs of remodeling can vary greatly but the price range for a new kitchen is $15,000 to $30,000, according to Remodeling magazine. A completely new bathroom will be about $8,500 to $15,000.

Both ranges can go much higher with higher quality materials or appliances.

Another move to consider is converting small rooms or large pantries or closets into a home office by wiring it for high speed Internet access and adding built-in cabinets and desks.

The amount recovered isn’t as great as kitchen and bath remodeling yet, but the Internet has increased the viability of working from home.

”Right now it’s a very attractive market for home equity loans,” said Mike Delvin, chief operating officer at Bank of the Cascades. ”Because there aren’t any fees up front and you can do anything you want with the money, it’s really popular.”

The typical term of a home equity loan is 10 years. Bank of the Cascades requires just an interest-only payment on a monthly basis. You can roll remodeling costs into a mortgage refinance and extend the term, if you were headed that direction anyway.