Can I afford a remodel?

Learn what to consider when deciding on which remodeling project to take on.
If you're considering making a major change to your house, your head is probably filled with all kinds of questions. Which room do I remodel? How long will it take? What's the return on investment? All of these are very valid and important considerations. But out of all the questions you can ask yourself, the most important is affordability.

If you haven't already talked to a contractor, you should. In fact, talk to a few to get a good idea of the range of cost and what they'll offer you. Whether you want to remodel a kitchen, a bathroom, or even do an addition, all projects of this scope have one thing in common: sticker shock. However, you might find that you can afford more than you thought. And with the benefits that the remodeling project brings to you, your home, and your family...it's probably worth it.

Remodel or Relocate?

Sometimes, the consideration for remodeling isn't simply to update or make a change. Maybe your family has outgrown your home. Or perhaps you've found aspects of your home that you wish were different. In these cases, moving to a new home might not be your only option.

Did you know that a move could cost 8-10% of the value of your current home, according to the American Homeowners Foundation? That means if your home is valued at $200,000, you could spend up to $20,000 to move! You could make some substantial changes to your home for that amount, like add a room, remodel a bathroom, finish a basement, or maybe even make your kitchen bigger.

And these kinds of changes don't just make your home more livable; they add value to your home. So, instead of moving to a house that fits your needs, perhaps the solution is to change to the home you're in.

Affording The Hefty Cost

Most often, big home-remodeling projects come with a big price tag to match. Very rarely does anyone save up a bundle of cash to pay for it all at once. To make the expense of remodeling easier to chew on, there are a variety of financing options available.

  1. Home equity loans and lines of credit are a very popular way to finance remodeling projects. Based on the difference between the value of your home and the amount you still have left to pay on the mortgage, a lender can give you a loan or a line of credit that you can draw against. This way, you can pay for the project in small increments over a period of time.

  2. Often, homeowners can refinance or take out a second mortgage to fund a remodeling project as well. If rates have dropped significantly since your loan was originated, refinancing can free up a big chunk of cash on your monthly mortgage payment. And a second mortgage might be a small increase in what you pay monthly, but it's easier than saving up a big sum of money.

  3. Some contractors provide loans of their own. The loan is typically issued by a bank or finance company, but it saves you the hassle of finding a loan through a third-party lender. Regardless, you need to take the time to read through the terms of your loan to make sure the terms are favorable to you and not just to the contractor.
Do It Yourself And Save

Depending on the scope of the project, you may be able to take it on yourself. If you can, you'll find that you can save a bundle. But before you strap on your tool belt, there are several things you'll want to take into consideration. You need to think about permits you may need, time out of your work schedule, tools you might not have, and city building codes you'll have to meet. There are many questions you need to ask, and the answers will be the deciding factor between taking the project on yourself and hiring a professional.

If you decide to hire a remodeling contractor, you can find many home remodeling experts and building contractors on Kudzu.com.

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