From Daniel T on June 23rd, 2010 in Tools and Tips
We’re living in a new economic age. As such, remodeling isn’t what it used to be. There are new features to think about and weird dynamics to grapple with. It’s not easy, especially if you’re an old hand at remodeling, and want to do it again like you did it before. Chances are, it may not work out the same way. Here are a few tips for playing it smart when you go to remodel in today’s economy.
Look and Loan
Most major remodel jobs are paid for not by a stockpile of cold, hard cash, but by a financing arrangement of sorts. If you’re not able to go cash (even though it’s the best way to go), be judicious in your selection of loan options. First, you need to find out what your home equity is. Do you owe more on your home than it’s worth? You’re not alone. Millions of homeowners are in the same situation, which will make it tough to get a nice home equity loan or home equity line of credit (HELOC).
Keep in mind that if you are able to get a HELOC, the collateral for such a loan is the home itself. Making a misstep on a HELOC puts you at the risk of losing your home. If you are in a tenuous financial situation as it is, your best option may be to put the remodeling plans on hold until things stabilize. Losing your home is not a good option to entertain.
The bottom line is this: research thoroughly before making a decision. Analyze your potential financial future for the life of the potential loan.
Though the economy is far from restored, there is one sector that isn’t doing too badly. It’s remodeling. Construction, contractors, builders, and carpenters (read, remodelers) aren’t doing that badly, especially since the government is putting out tax credit for green improvements and other types of energy-efficient home renovations. You have every right to be picky as you select a contractor.
When you are in the stage of selecting a contractor to do the job, you may very well be in the most important phase of the project. Selecting the wrong contractor could place you in a dangerous situation financially. Get referrals from the pros, request references, and interview potential contractors before coming to a decision. Your home is worth it. Your finances demand it.
Remodeling doesn’t have to be a depressing experience. Even though the economy has changed, making use of these simple basic tips will put you on the path toward a positive remodeling experience.