How to Manage Your Home Remodel
Once you are a homeowner, it is normal to want to make changes to personalize. Changes to your rooms that reflect your personality are a great way to create a place you love, but sometimes you want to make changes that are a little more dramatic. If you are considering a major remodel, addition, or demolition, you may be concerned about how to afford the process. As long as you make smart choices, remodeling will increase the value, so these changes are worthwhile in the long run. Affording them at the moment may require some creative thinking.
Free Up Some Capital
If you have equity in your home, taking out a HELOC, or an equity line of credit, can provide you with the cash you need to perform the renovation. You may be concerned about making the payments on your credit line, which is understandable, however take a critical look at your budget to look for areas where you could save money. Use a student loan refinance calculator to see how much you could save by refinancing your student loans. Once the remodel is complete, look at refinancing your mortgage. You can take into account the increased value and, if interest rates are favorable, you may be able to pay off your HELOC and maintain your monthly mortgage payment at the same level.
Spend Time on Bids
It is tempting to dive right into a remodeling project. You have probably been rolling the idea around in your mind for a while, and you know these projects often take longer than planned, so once you are ready to get started, the bidding process is one that often gets less attention. Get in touch with several contractors to start the process. While you want a good contractor that is in demand, you should still expect to be treated as a priority. If you choose a contractor that was unavailable during the bidding process, took longer than expected to get back with you, and seemed to lack basic communication skills, don’t be surprised when you are unhappy with the way the process unfolds. While some excellent craftsmen are poor communicators, it is okay to expect both quality work and a contractor that keeps you informed and up to date.
Make Sure it Makes Sense
Not all projects make sense. If there is something your property is lacking that others in the neighborhood have, it makes sense to bring the quality up so it matches the comparables. Also, if your home needs basic repairs to be comfortable, such as a new HVAC system, the remodeling process is worthwhile. If the project you have in mind will make yours the best in the neighborhood, or if they are changes that are specific to something you want, such as adding a pool when surrounding homes do not have them and many people do not want the expense and responsibility of owning a home with a pool, carefully consider your plans. If this is your forever home go ahead, but if you plan on moving in the future, you may not make your money back, and it may make yours more difficult to sell.