Renovation Loan Tips to Help You with Your Home Remodel

Sometimes, moving to a different place is not the best course of action. Relocating is not as easy or as ideal as you may think it to be. First of all, it usually requires you to leave your old life behind, thus changing your occupation, your circle of friends, and forcing similar change to your family. Then again, there are some people who choose to do so for this very reason. The problem, however, also lies in the fact that the next home that you move to might not have the thing that you’re looking for either. In order to get a home that you want you might need to make it and remodel might be the way for you to do so.

Other than just improving the quality of living within your home, a remodel can improve its safety and its overall value. Furthermore, by making your home eco-friendlier, you get to reduce the overall cost of utilities, thus increasing the efficiency of a home in question. Lastly, you get an update to home’s style, which is a move that might have an immense impact on your overall satisfaction with the property. On top of it all, you get to avoid all the downsides of a move.

1. Consider the amount of money you need.

The calculation is not easy due to the fact that you might be unaware of all that needs to be done. You see, new construction is more expensive but, somehow, easier to calculate. Think about it, you know the exact number of materials needed and the approximate duration of works. Here, you need to consider the degree of a remodel, which includes keeping some elements and working around them. Also, you get to consider the unforeseen events like delays, mistakes and faults in material and equipment.

For all of this to come together to your benefit what you need to do is know how to plan a proper budget. This starts by prioritizing your remodeling needs and trying to allocate as many of your resources to them as possible. Next, start making both minimum and maximum cost estimates in order to see exactly where you stand. Sure, it’s fairly easy to see average and median remodeling costs online, yet, there’s no guarantee that this is the amount that you’ll have to pay is same or similar to those that others are facing.

2. What are your financing options?

When it comes to funding your home renovation a home renovation loan is the most obvious choice. First of all, this is an investment and, as such, it has a certain ROI. Therefore, you need to start by considering the interest rate, amount of paperwork, the flexibility of use and lender options. A home renovation loan gives you an edge in all of these fields, which is why, if possible, it’s for the best that you opt for it.

Refinancing your home mortgage is yet another option that you could and should explore. First of all, it can provide you with a lower monthly payment. Second, it can eliminate private mortgage insurance, which is handy, due to the fact that your home will increase in value (especially since you last took the mortgage). However, for this to work, you’ll have to have at least 20 percent equity in your home which might not always be the case.

Finally, depending on the amount of work that you intend to do on the place, even a home construction loan might be an option. Think about it, if you intend to go for a drastic remodel, you would come terrifyingly close to new construction. In some of these scenarios, demolishing your home and building a new one would be a more frugal alternative. Nonetheless, there are a lot of things that need to be taken into consideration before you make this call.

3.Start doing your research.

First of all, you need to start negotiating with the various services you’ll need. For instance, you’ll have to pay for an electrician, pay for an interior designer, as well as pay a landscaper to make the rest of the property match the interior of your home. When it comes to this, you need to do some research on the specifics. For instance, how long are these works going to take? Second, you need to consider the amount of disturbance that this will cause within the home. Finally, you need to know the cost (the importance of which we’ve already discussed).

Other than this, you also need to plan for a scenario where things don’t go your way. Sometimes, the idea that you have won’t be available so what do you do when this happens? Do you cancel the entire remodeling project or come up with a different plan? If you opt for the alternative, is it something that you can really afford. All in all, you need to keep in mind that the amount of research that you’ll put into this might determine the success of the entire project.

4. Consider your living situation

While the renovation lasts, chances are that you won’t be able to stay in your own home. This means that you have several options. First of all, if it’s not a full remodel, you might still be able to use your home, to a degree. If not, you can stay with family and friends for a while but you should always make sure that you don’t overstay your welcome. Other than this, you could also stay at a hotel or rent out a temporary lodging. Needless to say, this too needs to be in your budget.

Keep in mind, however, that if your home is just partially incapacitated, you could take showers at the gyms or eat outside so that you don’t have to use the kitchen or a dining area. The latter also impacts your budget in more ways than you can assume. Still, this has an impact on your overall quality of life, which might make some people think twice before daring to embark on such an adventure. Just remember that this isn’t something that you’ll have to deal with every single day.

5. Plan for the future

The next thing you need to figure out is whether you plan to stay here for good or if you plan to flip the place somewhere in the future. If you plan to sell the place, there are some upgrades that just aren’t worth it. For instance, installing solar panels is a project that might take up to nine years to pay itself off. Therefore, it might not be worth it if you plan to sell the place in six months. On the other hand, pressure washing the place, redoing the façade and fixing the roof might give you a positive ROI. This is why you quickly need to learn the difference between being an investor and being an owner.

Also, if one of your plans is to sell, you also need to think about factors like curb appeal. Remodels that add to it aren’t necessarily the ones that increase the value of the place but they do make the place a lot easier to sell. Same goes for work involving the hallway, entryway and other elements responsible for the first impression.

6. Doing it room-by-room or all at once

Lastly, there’s one issue that needs to be addressed and it’s whether you should do the remodel in a room-by-room approach or tackle it all at once. On paper, going room-by-room is simpler to pull off, seeing as how it puts less strain on your budget. By doing the kitchen this year and the bathroom the year after that, you’ll have a much easier job controlling your expenses. Still, the end result isn’t always as favorable as you might believe it to be.

When it comes to overall costs, you end up paying the same amount and the impact on your monthly budget is, more or less the same. Instead of paying off one loan for several years, you’ll have to pay off several smaller loans (usually of the same or similar value) over the course of several years. In the end, your household budget won’t even feel the difference. The biggest difference comes in the disturbance that takes place in the household. Do you want to undergo one massive project and be done with it or would you rather suffer a series of smaller disturbances over the course of years? The choice is yours.

In conclusion

One last thing you need to understand is that your motivation makes a massive difference and it will help you make it through a massive project and help you justify a major expense with ease. For this to work, you need to know exactly why you’re doing what you’re doing and make all the steps that you, yourself, feel are worth it. Investing the right amount of time and effort into your preparation are also two factors that can make it all a lot easier. With all of these steps of precaution on your side, you just can’t fail.