5 Tips for Financing a Remodel

Are you getting the itch to remodel? Before you scratch it, you should know a few things first!

Jumping right into a remodel can backfire — on your wallet and your sanity. Knowing what kind of money you’ll be spending, where it will be going, and how to anticipate surprises will payoff in the long (and short) run. So before you start picking out your cabinet finishes, read this first!

1. My first piece of advice is to get pre-qualified . This is so important. Knowing the amount of money you’re pre-qualified for will give you a better idea of what you can afford and what kind of remodeling project you can undertake.

1. Once you know your budget, you should also know exactly what that budget will cover. When you’re creating a budget, you need to know if that final number is just for construction or if it’s all in. For example, if your budget is $200,000, it doesn’t necessarily mean that $200,000 is going toward your construction costs. You have to consider soft costs and contingencies. Your construction budget for actual remodeling might come out to $140,000. So make sure your scope of work aligns with your actual cost.

1. This one is simple: Once your budget is decided, then you can come up with your dream remodel plan. (Read this if you want to get to know a little more about saving and splurging! https://monicadhiggins.com/where-to-splurge-and-where-to-save/)

1. With a budget and dream plan in mind, some homeowners wonder if they should do their remodel project all at once or in phases. I’m here to tell you that you’ll save money if you do everything all at once. You could decide to use that $140,000 for this phase. However, finding your financial resources at once is much easier to do. Also, doing a project in phases has other very important risks: construction costs only increase over time, meaning you’ll be spending more money down the line and less time enjoying your new space!

1. Have you thought about interior decor? New Furniture? I think of remodeling a bit like plastic surgery — you might get a nip and a tuck here and there, so you’ll want to show off your new look with new clothes! Same thing goes for your new space. Once you’ve done a nip and tuck to your home, will you want new furniture that fits your home better? Sometimes old furniture and design don’t go well with the new space, so adding interior design costs to your overall budget will set the stage for a completely new look!

To learn more about budgeting for your remodel, click here!