Planning Your Remodel in the New Year
Set a Budget ( & Contingency)
Your first step to planning a remodel is to come up with a rough estimate of how much you can spend on your remodel.
To understand industry trends and to see if your budget is realistic, we recommend getting estimates from a few different contractors. Check out this blog where we explain how to pick a general contractor.
When comparing estimates, if one contractor’s bid is below the others by a good margin, we recommend throwing it out. It will sound appealing but open the door to errors which can cost you more money later. You should also make sure the scopes of work are the same so you can accurately compare the estimates.
Once you get an estimate that looks good for you, plan for a 10% to 20% contingency for unforeseen problems and changes that occur on every project. When remodeling you should remember that we could find hidden or unexpected issues that need to be remedied- an example of this would be finding mold in the walls. The remodeling industry is seeing pricing increases and longer lead times by the day. By being aware of this price increase, you can plan for it which will help eliminate any stress.
Many homeowners that are looking to remodel decide to get a loan. Figuring out which loan works the best for you will be key to getting your project moving.
The Four Different Types of Loan Options
- Cash-out refinance
- A home equity loan
- A home equity line of credit (HELOC)
- Construction loan
For most homeowners, the best way to borrow for renovations is a home equity line of credit. A HELOC is a loan that’s ensured by your home equity. HELOC loans qualify for a lower rate than other loan types. You can even deduct the interest on your taxes.
How Much Time Should I Set Aside for Remodeling?
Before meeting with contractors, decide which time of year would work best for you and your lifestyle to have a renovation taking place in your home. You can talk with your contractor about this and fit the project in well for both of your schedules. You can even plan big renovations around your vacation schedule. If you know you might need to be out of your home for a few weeks or even months due to remodeling, it’s a great time to take a well-deserved vacation.
Prioritizing your Remodeling Needs
A great way to pinpoint exactly what you want to be remodeled and when is to figure out what your why is. Is your why wanting to have a more open concept kitchen to entertain guests? Maybe it’s creating a more peaceful master suite? Is it adding an in-law apartment to be close with your loved ones? Figure out what the bigger picture of the remodel is. This is important because it will help you answer a few questions…
What are you willing to compromise on?
What are you willing to splurge on?
This will help you plan your remodel and give you a framework to help you prioritize your needs. Start planning your home remodel with us today!