Janet Laughead's Blog
If you intend to list your house in the weeks to come, you may want to complete a wide range of home improvements. That way, you can transform your ordinary house into an awe-inspiring residence, increasing the likelihood of a fast, profitable home sale.
Although you may have lofty expectations for your home improvement projects, it is important to note that performing myriad home repairs can be costly. And if you're not careful, you risk overspending to upgrade your residence.
Fortunately, it can be easy to establish a home improvement budget – here are three tips to help you develop an effective home improvement budget.
1. Determine Which Areas of Your House That You Want to Improve
When it comes to crafting a home improvement budget, it is important to differentiate between major and minor home repairs. By doing so, you'll be better equipped than ever before to budget for assorted home maintenance projects.
A kitchen overhaul or bathroom renovation may be considered a major home improvement. Conversely, updating the color of your bedroom may be a minor home improvement. If you assess the major and minor home improvements that you want to perform, you can put together an appropriate budget.
Of course, you should take an objective look at you house to decide which areas that you want to improve. With an objective view, you can identify various home issues, determine how much money will be required to fix these problems and budget accordingly.
2. Examine the Home Improvement Funds at Your Disposal
In all likelihood, you only have a finite amount of money at your disposal. Luckily, regardless of how much money you have, you should be able to establish an effective home improvement budget.
Oftentimes, it helps to get multiple quotes from home improvement professionals. If you receive a variety of quotes, you may find that you can save money on home repairs, as well as stick to a tight home improvement budget.
It also may be cost-effective to complete simple home improvement projects on your own. If you possess the skills and know-how to perform quick, easy home repairs, you may be able to enhance your house without putting a dent in your home improvement budget.
3. Set Home Improvement Priorities
Priorities are important, particularly if you need to put together a home improvement budget. It generally is a good idea to set priorities for different home improvement projects. Then, you can allocate the necessary time and resources to complete home improvement tasks in order of priority.
If you plan to list your house soon, home improvements may prove to be exceedingly valuable. Home upgrades can help you differentiate your residence from the competition and enable you to achieve the optimal home selling results.
Lastly, if you need extra help prior to listing your residence, it may be beneficial to collaborate with a real estate agent. This housing market professional can put you in touch with top-notch home improvement professionals, offer home improvement tips and insights and much more.
If you’re trying to decide whether it’s best to move from your current home or to make the necessary improvements on the home, it’s not an easy decision. One thing you may have to consider is how to get the capital in order to have those home improvements done.
There’s a variety of options available to you in order to secure a loan to renovate your home. Whether you need to renovate the kitchen, build out from your current property, or replace the heating system, there’s ways that you can get the money to complete these necessary updates.
One thing to consider about any of the options discussed is that you don’t want to be paying for home improvement loans until you need to update everything once again. If you’re preparing to sell your home, making improvements is a wise choice, as it can increase the return that you’ll get on your home.
Don’t Run Out Of Cash
If you cannot complete the improvements that you started, you may not be able to get another loan to complete them. You can typically borrow between 80 and 90% of your home equity. The downside to refinancing your home or taking out home equity lines of credit is that you’ll need to pay closing costs once the loan is approved. In other words, you’ll need to put out some cash in order to get some cash.
Use Your Own Cash
If you have some cash saved up, it’s wise to just do one project at a time. This can take some time, but can be more economical in the long run. If you don’t need to complete your repairs in a hurry, then using your own savings is a good idea.
Refinance Your Home
If you would benefit from a lower interest rate, refinancing your home can be a great option. As long as the cost of repairs doesn’t exceed the number of years that the updates will last, refinancing makes sense.
Home Equity Credit Line
If your mortgage is locked in and working for you, home equity lines of credit are always a good option. You can draw money out as you need it and pay it back as you go. You won’t need to pay interest until you use the money and the loan is good for 10 years. The downside is that if you don’t make the payments, you could lose your home.
Home Equity Loans
This type of loan allows you to borrow a fixed amount and then pay back the loan with a fixed monthly installment. A 15 year term is typical of this type of loan.
A construction loan can be used to build a house or to make large-scale renovations. These loans are short-term and not always easy to find access to. Not to mention that they are heavily managed and perhaps the least popular option presented here.
FHA 203K Loans
This type of loan is generally used to purchase a home that is in need of much repair. The downside is that you’ll need mortgage insurance for the entire life of the loan. Less complicated repairs often offer a more streamlined FHA loan of up to $35,000.
FHA Title 1 Loans
These loans provide up to $25,000 for home improvements. The money is insured by the federal government and can be obtained from approved lenders. Homeowners don’t need access to equity in order to get one of these loans and they are available in 20 year terms.
These are just some of the options that are available to you as a homeowner seeking ways to get cash to make improvements to your home. You can tap into other types of personal loans including credit cards. Really, you need to do what’s best for your finances. It’s good to know that there’s options available to you to improve your home.