Home Renovation Tips
Renovating vs. Moving
The first step before renovating a home is to decide if it’s best to renovate or move.
Deciding Whether to Renovate:
Evaluate your needs. How long you plan to be in the home, space you may need in the future, etc.
Compare renovation and moving costs. It could be less expensive to move than to renovate and make home improvements.
Watch the total project cost. Be sure the improvement doesn’t raise the price of your home so much that it’s the most expensive in the neighborhood.
Weigh the pros and cons. Don’t solve one problem but create another. For example, converting a garage into an office may affect resale value.
Consult an expert. Talk to a realtor and get multiple contractor quotes before beginning your home improvement project.
Invest wisely. Make sure the home improvement cost will be recouped in the eventual sale of the house.
Make small investments. Sometimes several small renovations yield a better return than a major remodel.
Planning to Move:
Save for a down payment.
Have good credit.
Get pre-approved. Homes go fast. Use a realtor.
Have inspections.
Keep your lender updated with home purchase status.
Be flexible with the seller on items that are not important to you.
Talk regularly with your realtor and lender to avoid stress in the process, and don’t pick a home you can’t walk away from.
Planning Your Renovation
Plan Your Renovation: It’s important to plan your renovation projects in a strategic and efficient way to maximize your budget. For example, new paint and flooring should be done after major demolition and framing projects.
Tour New Home for Inspiration: Before planning your home renovation, tour a few new model homes to look at how new homes are being laid out. You may pick up some ideas you never thought about that are a perfect fit for your home.
Take Advantage of Existing Resources: Online resources are available to help you plan and design your home improvement project. Your realtor can also help you prioritize projects. Contractors will know what styles are trending and how other homeowners are renovating their homes.
Planning Your Renovation Budget
It is important to set a total renovation budget and stick to it. An important part of your renovation budget will depend on what parts of the renovation you must have and what parts you can live without.
What you need to know:
Be sure to round up and add some extra money to your budget for any unexpected costs that may pop up.
You will want to secure multiple quotes for the project to compare costs.
If the project is not being paid in cash, calculate the cost of financing.
Include the option of completing some or all of the project yourself if it’s something you are comfortable doing.
Be sure to research any required county building permits.
Read the fine print carefully when working with a contractor and review what is included in the cost. Also be sure the project has a predetermined timeline for when it will be complete.
Be sure to keep all receipts, estimates, contracts, and other paperwork associated with your projects.
Staying on budget:
If you are able to do parts of the job yourself, be sure the contractor reduces the cost of the project to account for the portion you will complete.
Hold off on the renovation until you have saved at least a portion of the projected project cost.
Complete the project in the off-season. Significant savings can be gained by working with a company during their slow season.
Financing:
If you have lived in your home for multiple years, you may have equity that can be used to finance your renovation. Home loans require appraisals, and the condition of your home is important.
Obtain the appraisal before you begin a project to ensure the current condition of your home doesn’t negatively impact the appraisal value.
You may be able to refinance your home mortgage to receive cash back. This is similar to a home equity loan but is not the same.
A credit card may be an option, especially if you earn rewards and plan to repay the entire amount before interest accrues.
Here are Some Tips to Help
Have money saved: Having some cash available to pay for the project lowers the amount of money you may need to borrow, which can save you money in the long run.
Determine the equity in your home: To gain an idea of the equity you may have, take the price your home could sell for and subtract the amount remaining in your home mortgage loan.
Adhere to building codes: Failure to obtain and post the proper work permits can be very costly and may even cause liability issues when reselling the home. Make sure you follow the rules to be sure your project meets building codes if you are completing work without a contractor.
Know when to DIY: While there a free videos on how to do just about any project, don’t be overconfident in your DIY abilities, especially if plumbing and electrical work are required.
Finance wisely: When calculating the overall cost of the project, look at how much you will pay per month for various financing options, and try to select the lowest overall option.
Plan ahead: Be prepared that many projects will involve a lot of dust, machinery, and foot traffic through your house. A contractor can help you plan the order in which projects are started to minimize the possibility that a new project will cause damage to another recently completed space.
Get Pre-Qualifed for Financing
With a few clicks you can get pre-qualifed for a mortgage loan. When planning a move in a hot market, being pre-qualified makes it much quicker and easier to make that offer on your dream home right away when you find it.
Learn more about our mortgage loans. Give us a call at 765-529-6632 to see if we can help you or feel free to fill out our online Loan Application!
You can also learn more about our home equity loans and fill our our home equity loan form to get started!
The information provided is not intended to constitute legal advice and is intended for general informational purposes only.