Funding Your Home Renovation

By administrator On October 6th, 2009

Home owners that decide to go in for a renovation are often faced with a dilemma regarding the nature and source of funds for their remodeling. The extent of remodel, your present financial condition, and also the cause for remodel play a role in deciding what funding type will best serve your purpose. If it is a small remodeling job, probably the best thing to do is to pay out of your own pocket and not incur a loan with the risk of your credit score being affected if you fail to pay on time.

You can consider a HELOC or a bank loan if you are planning a remodel that will help you sell the house at a profit in the near future. You can pay off the loan amount easily with the money from your house sale.

The advantage of using your own money, whether cash or savings is that you have a ready interest-free reserve of money; the disadvantage of course is that you deplete your savings.

Small renovations can be carried out using your credit card provided you can pay off the amount at the end of the month; this way you avail an interest-free loan. You could also consider a zero-interest loan that has a period of six months to twelve months. The plus of using a credit card is that you can accumulate some major credit card points, you can avail a zero-interest loan for a long period and then it is also possible to move to another zero-interest loan. The downside is that you are faced with a big interest charge if you fail; also you may use more money than you are actually capable of repaying in time.

A home equity loan is an age-old way to finance a home improvement or a remodeling project. The advantage is that these loans have lower interest rates; the drawback is that you deplete your equity in your property. These loans are best availed for particular home remodeling jobs that will add to the value of the home.

A great way to cut costs and save on remodeling expenses is to get friends and family to pitch in and help with the project. Although you will pay for the materials used, you save on labor and the process to will be enjoyable. The only thing you’ve got to be careful about is that you need people who know their way around tools – try and get things done right the first time itself. Time is also a cost that you need to consider.

How Do You Save on Remodeling Costs?

By administrator On October 5th, 2009

The first thing to check is if you indeed do require a remodeling – you save a lot on prospective remodeling by simply not doing it. But what if you do need a remodel? In that case you have to do some research to find out the best cost saving means so that your remodel gives you the desired look with minimum expense.
• Be intelligent in choosing your source of funding. If it is an addition that you are going for, then it is a major expense and you may require a loan. A HELOC or a home equity loan is any day a better option than a personal loan. If you are already having a mortgage, then you are best advised not to go for a major renovation. Stay away from a second mortgage.

• If you can refurbish old structural elements such as walls and floors, it will always work out cheaper than giving the walls and floors a new finish.

• You will save on cost if you build upward instead of outward. If you go for an addition outward, it will work out expensive because of the foundation work involved.

• As far as possible avoid moving the plumbing because the moment you touch the plumbing, the remodeling costs shoot up. See if you can plan a bathroom and kitchen remodel without having to move the plumbing. The same is true for electrical wiring work.

• Consider all the jobs that can be done as DIY projects; but be careful here. Many jobs are specialized and require more than one person. Also the tools required for certain home remodeling projects are specialized and are mastered with some training.

• Consider staying at your house while the work is on. Renting an apartment is an option but do you really want to do it? It is a cost that can be avoided if you are willing to rough it out for a few days.

• Compare costs between remodeling contractors; ask them about discounts on their labor as well as material. Get references on the people you wish to work with. It will save you both time and money if you’re working with good remodelers that can get a job done right the first time itself.