The housing market has heated up over the last few years, and home values have risen right along with sales. In 2013, the average homeowner saw their home price increase a whopping 10.8% compared to the previous year, followed by a respectable 4.8% rise last year. Expert predictions for this year range anywhere from 2.5% to 5%. For people staying in their current houses rather than selling, this means that there is an abundance of home equity offering the opportunity to renovate. Before you tap into that equity through a refinance or home equity loan, read our tips for making your next home renovation go as smoothly as possible.
- Consult a real estate expert.
Before finalizing any renovation plans, run your ideas by a local real estate agent. Make sure not to out-price your home for the neighborhood or to put too much money into a room without much impact on resale value. Experts generally agree that the kitchen and bathrooms have the best return on investment, so think about starting in those spaces before moving on to other areas of your home. If you need a reference, contact us for a recommendation from our stellar network of agents.
- Ask for referrals.
Before choosing a contractor, consult your circle of contacts for personal references. Ask around at work and post the question to local friends on Facebook. Read online reviews at Angie’s List to confirm ratings of your top choices and check any contractor’s license number to make sure it is valid and actually belongs to that person.
- Plan in advance.
Not only should you check your own calendar for major conflicts, but you also need plenty of time to get on your selected contractor’s list. Contractors in high demand can be booked for months in advance, so plan early to ensure you hire the best workers in the time frame you need your project completed.
- Request an itemized contract.
Make sure your contractor provides a contract with each portion of the job outlined and itemized, along with a completion date for the entire project. If a contractor doesn’t automatically provide you with this information, it may be a red flag to look elsewhere.
- Don’t break the bank.
Whether you are saving up for your renovation project, refinancing to cash out or taking out a home equity loan, make sure you have enough money to cover any surprises. Keep an extra 10-15% of your project budget available in case of any surprise issues that crop up.
- Prepare your home.
A few simple precautions and preparations can ease the process, no matter what portion of your home is under renovation. Keep simple meals prepared in your freezer or plan to order in some nights, even if you’re not working on the kitchen. After a long day of dealing with contractors, noises and debris, you’ll appreciate the reprieve from cooking. You should also stow away any expensive breakable items so they don’t get damaged or dirty. Finally, consider spending a night or two away from home if any major discomforts arise, such as paint drying or water getting turned off.
- Stay flexible.
No matter how much planning you do in advance, you can’t control everything. Before getting started, ask your contractor about some common hiccups associated with the work being completed. Hopefully those things won’t come up, but having them on your radar helps to keep you from being totally blindsided if a problem does arise.
If you’re ready for a renovation project of your own and thinking of using your home’s equity to fund your plans, contact Carlyle Financial. Our mortgage experts will review your current loan to find the best product for your refinancing needs.