Financing Minor Home Renovations: 5 Useful Tips Beforehand

Published on: Sep 23 2013

Home RemodellingSource: Flickr

When deciding to renovate parts of your home, as exciting as it may be, there’s always finances to consider. Even minor projects can create big bills and it’s not always feasible to do every project you’re inspired to do. It’s important to consider your options before diving into renovations, and even more important to assess your financial situation before promising to pay anything. We’ve got a few helpful tips to guide you through minor home renovations and financing them easily and painlessly (though your wallet might feel a sting).

Look at Your Financial Picture

Consider everything that’s going to go into your project- from wood to nails, to outside help and other possible costs. It’s possible that you’ll run into the project being bigger than you thought, such as discovering damage you didn’t know was there or materials you didn’t think you’d need. Sort out every path your project could take and all possible costs involved. This way, you’ll have a wide range of numbers and know how much money you could potentially be spending.

Consider an Inspector/Appraiser

If there is a chance you could run into problems, consider hiring an inspector to come look at your home. They can let you know what extra work may need to be done to your home and whether you’ll be able to do it yourself or if you’ll need and expert. An appraiser, once you know the work to be done, can help you realize if the finances and remodeling are worth it considering the value of your home.

Home RenovationSource: Flickr

Chat with Local Real Estate Agents

If anyone is going to know the value of your home compared to other, its your local real estate agents. By chatting with them, you’ll determine if your home, after renovations, will be in the ballpark value of other surrounding homes. You can get estimates on what the average kitchen in your neighborhood costs and then plan to not spend more than that when doing renovations. You can call an agent to get comparable prices in your area, or go to and look at recent home sales in your area. There is such a thing as “over-renovating,” and it can cause your home to be overvalued in a low-value area, which means when its time to sell, no one will buy your home. Avoid this by not increasing the value of your home more than 25% than the existing value of homes in your neighborhood.

Be Sure You’re Adding Value to Your Home

Though there’s a risk of putting in too much money, you still want to make sure that the renovations you’ll undertake will add value to your home, otherwise they’re simply not worth it. Stick to upgrades that are can’t-lose, like stainless steel kitchens, granite countertops and wood floors- these are home renovations that are always popular and in high demand.

Decide How to Pay

Once you’ve decided that your home renovation is indeed worth it, it’s time to figure out how to pay. Home equity loans are your most likely option, and from there you can do an open-ended loan, which is similar to having a credit card debt that charges as you buy, or a “cash-out” refinance which gives you cash up front and pays what you need. Neither is better than the other, it depends on your particular project and its cost. It’s also important to plan to cover 10% to 25% more than you’re planning on spending- just in case.

Renovations are an exciting and important part of owning a home, but many options need to be taken into consideration before starting even minor projects on your home. Follow the steps above to begin planning your renovation.

Sheyna Webster writes for Steamer’s Carpet Care, a local San Antonio carpet services company that focuses on quality and convenient care for customer’s homes.

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