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Improving your existing home: costs

There are many costs to consider in a home improvement project — from the contractor's fee and the cost of permits to the price of materials for your renovation work. It is a good idea to sit down before the project begins and make a list of your expected expenses. As you do this, you will also want to take a close look at your financial picture. This might include getting a copy of your credit report, which is available through the three major credit-reporting agencies, and verifying that the information is accurate. Then talk to your lender about various home improvement financing options and consider how the project cost will affect your long-term financial goals.

Several options are available for financing home improvements, including a home equity loan, home equity line of credit, or a loan that allows you to combine a refinancing of your existing loan with funds for home renovations. Your lender can help you determine the financing option that will meet your needs.

Improving your existing Home: Projects

Most home improvement projects fall into three general categories:

Major renovations, which include add-ons, and bathroom and kitchen remodeling; installing new decks or patios; finishing basements or attics; or making modifications for handicapped access.

Repair work, such as energy-efficiency improvements, termite damage repair, roof repairs and other health and safety repairs.

Cosmetic changes, for example, interior and exterior painting, carpeting, molding, or floor refinishing.

Generally, the most popular remodeling projects involve redesigning or adding a new kitchen, bathroom, family room, home office, or other room addition. As a general guideline, kitchen and bathroom remodeling projects bring the highest percentage return on investment. These projects are popular because they strike at the heart of what homeowners and buyers want — comfortable, efficient space designed to reflect the way they live.

Minor repairs and most cosmetic changes may not require a home improvement loan, although they may be available if you need one. Larger repairs and most major renovations, on the other hand, can be expensive, particularly if they involve updating and reconfiguring structural and mechanical systems. Also, larger repair jobs may require the skills of a number of professionals (e.g., an architect, plumber, electrician, painter, etc.), which can be costly.

When undertaking a large home improvement project, a home improvement lender can offer assistance. With certain loans, your lender will oversee disbursements to the contractor, which helps ensure that the work proceeds smoothly, and typically requires periodic inspections of the contractor's work.

As you consider remodeling your home, think about your long-term goals for the house and how long you plan to live there. Also consider whether expanding a minor project will be more cost effective in the long run, rather than going with a quick fix. homeowners and buyers want — comfortable, efficient space designed to reflect the way they live.

Minor repairs and most cosmetic changes may not require a home improvement loan, although they may be available if you need one. Larger repairs and most major renovations, on the other hand, can be expensive, particularly if they involve updating and reconfiguring structural and mechanical systems. Also, larger repair jobs may require the skills of a number of professionals (e.g., an architect, plumber, electrician, painter, etc.), which can be costly.

When undertaking a large home improvement project, a home improvement lender can offer assistance. With certain loans, your lender will oversee disbursements to the contractor, which helps ensure that the work proceeds smoothly, and typically requires periodic inspections of the contractor's work.

As you consider remodeling your home, think about your long-term goals for the house and how long you plan to live there. Also consider whether expanding a minor project will be more cost effective in the long run, rather than going with a quick fix.

For informational and educational purposes only.