A Guide To Setting Your Remodeling Budget
Remodeling your home is one of the most rewarding investments you can make! Whether you just purchased a house or you’ve been in the same one for decades, you may find yourself considering renovations to make it more suitable for your family. Setting a budget for your remodel is a practical first step. To make this process a little easier, consider the following:
1. Your funding options. Consult your financial institution or mortgage broker for your options and advice. Some of the options could include:
a. Cash Savings: Perhaps you have been saving for your remodel for years and prefer to use cash savings.
b. Cash-out Refinance: If you have equity in your home, you can do a cash-out refinance, which is refinancing your home to cover the existing mortgage balance and utilizing your equity to add in additional funds to cover your remodel.
c. Equity Line of Credit: A home equity line of credit allows you to draw funds as needed, up to a maximum based on the amount of equity you have available in your home.
d. Equity Loan: A home equity loan is a lump sum loan based again on the amount of equity available in your home. This is often referred to as a second mortgage.
2. Your motivations. Make a list of the goals you hope to achieve by renovating your home. This may include things like: expanding your living space for entertaining, opening up a closed floor plan for better flow, preparing for aging in place, or creating a master suite that doubles as a private oasis.
3. Your home as an investment. Some people go on vacation, take “stay-cations”, or do both. When you go on vacation you don’t look to see what investment every penny you spend will get you. It’s about the experience and the life-long memories created. It’s the same when considering how much money to put in your home. Don’t just consider how long you’ll be in your home and your neighborhood’s worth. Think of the quality of life you’ll get out of it and the memories you’ll make with friends and family. It’s the “I love this space so much” feeling. It’s the “Wow, I am excited to have friends over now” feeling. You’re in your home everyday and you should love it.
4. Your wish list items. When you think of your dream space, what are the elements that you feel are must-haves or necessities? These would include things that you find critical to the design such as double vanities, white kitchen cabinets, hardwood flooring, or a bay window.
5. Your Experience. It can be tempting to go with the cheapest contractor available but be careful to not compromise quality in order to save a few bucks. Remodeling your home is an investment, and investing in a reputable company who will produce the results you want, while creating an enjoyable experience, is priceless. Ben Franklin’s saying, “The bitterness of poor quality remains long after the sweetness of low price is forgotten” rings true for remodeling.
Benson Homes is one of Coastal Virginia’s premier design-build firms, specializing in residential remodeling and additions. Our business isn’t just about remodeling homes; it’s about creating an exceptional remodeling experience for each and every client. Are you ready to love your home again? We’d love to talk!