How to Budget for Home Remodel

Wednesday, November 18 2015 11:07 AM

Thinking of remodeling your home? The first thing you’ll want to do is figure out a budget for the project that you can live with. This involves figuring out a few things.

  • Which part(s) of your home do you want to remodel?
  • How much can you afford to spend on a remodel?
  • What will it cost to hire a contractor for the project?
  • What materials can you afford for the project?

Setting a Budget

Once you’ve figured out where in your home you want to remodel, the next step is setting a realistic budget. If you have money saved, then the answer is easily budgeting for a home remodeldetermined by how much of your existing money you want to dedicate to the project. Of course, you could always combine your existing money with some financing from your bank or another lending institution.

If you plan on borrowing, you’ll need to figure up how much the loan will end up costing you each month. There’s no sense in remodeling if the project will leave you with unmanageable debt. Typically, there are three types of financing available: cash-out refinance loans, home equity loans and home equity lines of credit or HELOCs.

Most homeowners will take advantage of a HELOC for a remodeling project, because it’s a low-rate line of credit secured by your home’s equity and you can deduct the interest on your taxes. It also works better than a one-time loan because you can draw from it as needed.

Get Contractor Quotes 

Once you have a ballpark budget established, you’ll want to determine the elements of the remodel you want and prioritize them. If you’re wanting your kitchen redone, for example, list which elements and materials are the most important to the remodel for things like countertops, cabinets, appliances, floors, etc. Having this information figured out beforehand will help you communicate with your prospective contractors and help you get accurate estimates on the work and materials involved.

When looking at contractors, make sure they are licensed to do the work, check their references, ask to see examples of similar work they’ve done and check out any online reviews of their work. Doing your due diligence will save you headaches down the road and keep you from spending money on unsatisfactory work.

With any contractor estimate, remember that it is only an estimate. Leave some wiggle room of 10% to 20% in your budget for unforeseen circumstances and changes that usually occur in a remodel.

Scale Back if Needed

Often project goals and budgets don’t exactly line up, so you’ll need to work with your contractor to find ways to make the project fit into the budget you’ve set. Cost-cutting measures can include finding alternate materials for items like countertops, flooring, etc. or keeping existing elements, like appliances, that are still in working condition and can fit into the new design.

If you’re looking to remodel your home and have questions or would like a free estimate on an upcoming project, contact us at All Seasons Construction today at (316) 685-1700 or fill out our contact form and we’ll be in touch shortly.

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