How will you pay for your home remodeling project?
You’ll probably borrow money, but there are many ways to do it. Which one is the best for you?
If you have the cash on hand, this is probably the best way to go. But let’s face it, not many of us are sitting on a huge nest egg. Some people turn to the Bank of Mom & Dad, and that’s a good idea if they can spare the money, won’t charge you much interest and won’t tell you how to remodel your home.
Home Remodeling At All Costs
According to Remodeling’s Cost-vs.-Value report, many home remodeling projects can run anywhere from $10,000 to upwards of $100,000. The scope and complexity of each project can vary widely, thus so can the cost. An addition with a bathroom will cost a lot more than new vinyl siding.
Once you have an estimate for your project, you’ll know how much you need to borrow. You might be able to foot some of the bill from your savings, and using that money means you’ll pay less in interest.
The good news is that your house is probably worth more these days, since housing prices are rising. The bad news is that interest rates are rising too. For this reason, home-equity loans often make more sense than refinancing your mortgage to pay for your home remodeling project.
Some home-equity lines, however, have variable interest rates, so you could see your monthly payment amount balloon, depending on the direction the economy is going in.
According to a recent New York Times article, the average amount homeowners draw from a line of credit is $50,000, most of which is earmarked for home remodeling.
Home Remodeling = Home Improvement
One thing is for sure — home remodeling is a good investment. While you likely won’t get back a 100 percent of what you put into your project, your home equity is infinitely better spent here than on vacations, new cars or other items that lose value over time (or immediately!).
If you’re thinking of embarking on a home remodeling project but aren’t sure you can afford it, call Falk Construction. We’ll come out to you and learn exactly what you have in mind. We’ll prepare an estimate, and we’ll go over it carefully with you, showing you how you can save here and there by making different choices.
Once you know how much your home remodeling project will cost, you can start exploring the best way to finance it. The experts at Falk can work with you to make your dreams come true.