Home Improvement Solution

Posts Tagged ‘Carpeting’

You’ve got your eye on the out-dated kitchen or you think you might want to just tear up your carpeting and install hardwood floors, but before you start to rip out the cabinets or the carpet make sure to establish some guidelines for your home improvement plan. A good home improvement plan should take into account: budget, financing, scope of work, functionality and aesthetics, resale value.

Budget Considerations

One good way to find out what you can afford is to simply get three estimates from contractors. Discuss what you want with the contractor and if the estimate is high, ask them how you can reduce the costs. The estimate should be separated into cost of materials and cost of labor. By getting a professional opinion first, you may find that the bids are very similar and you have a good starting point for the high-end cost of your project.

Now, you can begin to factor in whether there is some work you can do yourself. This will improve the amount of cash outlay necessary to complete the work. Another way to get to meet your budget is to shop for a cheaper source of materials or change the type of material used. Either way, these are highly flexible items in your home improvement budget.

Sources of Financing

If one doesn’t have the money, the inclination is not to do the home improvement. Cash, however, is not the only way to pay for a home improvement plan, you can also finance. If you find you don’t have enough cash, you can use a home equity loan to finance the remodeling of your home. Try to identify additional forms of financing in case you need additional monies to complete the project. In the end, a home improvement project should add to the resale value of your home for it to be a sound purchase.

Scope of Work

This is where a good plan is essential. If you are planning a major remodel, you will want some basic plans drawn up, preferably by a professional. You don’t want to find out later that the wall you envisioned removing for a more open space is a critical weight-bearing wall. Similarly, you don’t want to plan for electronic appliances and devices in an area where there are no outlets. If you plan on revamping a kitchen, the dimensions of workspace and appliance real estate are very important. Don’t try to eyeball it or you’ll end up paying for it later in time, additional work, or wasted purchases. By trying to define the scope of the work on paper first, you can bypass many of the simple problems that arise from not having thought the improvement plan out thoroughly.

Functionality And Aesthetics

Obviously, we don’t just want to substitute one thing for another, we want the new home improvement to outshine the old room. We want it to work better for us and we want that “ah” factor too. Have you done your research on the functionality of the appliances and space arrangements? How about the aesthetics and maintenance of the materials you chose? Does the improvement help to accommodate the growing needs of your family? Will it continue to be of service after 5 years? 10 years? These are all factors that should be considered and weighed against budget, scope, and resale value.

Resale Value

This is a tricky value that can’t really be foreseen that much. We know that kitchen and bathroom remodels recoup the most on the sale of the house. No home improvement will recoup 100% of the price it took to remodel, however, if you are in a climbing real estate market that might not matter. What you don’t want to do is to add a home improvement that detracts from the value of your property. Adding a fifth bedroom in a neighborhood of four bedroom homes would be detrimental to the value of your home. Adding a swimming pool in areas where houses with pools don’t sell well would also be considered an investment that could not be recouped. Some people still do it anyways. The point is that most home improvements are done to meet the needs of a particular family and the desire for a more comfortable living space. While resale value is important, it is just one of the many considerations that have to be evaluated in a good home improvement plan.

As the name suggests, home improvement loans exist to enable borrowers to make improvements to their properties, with the aim of increasing the value of that home. Such improvements can include adding an extra room, remodeling the kitchen or bathroom, replacing the roof, building a garage, installing a pool, or completely decorating and re-carpeting the whole house. To be eligible for a home improvement loan, the borrower must own their own home or be making regular mortgage payments on their property.

These are secured loans, based on the current equity in the home. Borrowers can potentially qualify for tax deductions on the home improvements as long as the work is one their primary property and not a vacation home or rental property. The interest rates on these loans tend to be relatively low, when compared with personal loans, as the lender is not taking much of a risk, and can assume that the improvements will add value to the property.

There are two types of loan available to borrowers; traditional home improvement loans and FHA Title I home improvement loans. The traditional loan requires the borrower to own at least twenty per cent equity in their property, preferably more. The collateral for the loan is the existing equity in the house, along with the expected additional equity that will be generated by the home improvements. The lender secures the loan by taking out a first or second lien. The term for this type of loan is usually ten years, although this can be extended to fifteen depending on the amount borrowed. The interest paid on the loan is tax deductible.

The second type of loan, the FHA Title I loan, is part of a US Government sponsored program intended to enable homeowners to improve their properties, even when they have little or no equity in their homes. These loans are available through approved lenders, usually banks and the borrower does not need to have equity I their home to use as collateral.

Some home improvements that are considered luxuries, such as installing a pool or barbeque pit, are not allowed under the Title I program. The term of the loan can be up to twenty years, and these loans are available to individuals with poor credit history, so long as they can prove their recent financial affairs to be in order. Under this program, if the loan request is less that seven and half thousand dollars, the lender does not take a lien on the property. The requirements for Title I loans are less stringent that traditional home improvement loans, making it possible for almost all homeowners to take out such a loan.

If you are considering buying your first home you should check to see if there are any special programs available in your chosen community for first time buyers. There are various things to look out for in a first time buyers program which include ensuring that the provider offering the program has been established in your community for a reasonable length of time. Some mortgage companies come and go, and supposed special offers may be deceiving. You should also check the requirements for the program. The best programs will be aimed at helping low or moderate income families. They should offer low interest rates, reduced deposits and low closing costs. Also check if they offer education on home buying.

Whether you are buying your first property, or considering taking out a home improvement loan on your existing residence, always thoroughly consider your options, check what programs are available to you, and if you are confused, get some good financial advice from an impartial source. Choosing the right type of loan and a good provider can save you a lot of money and hassle in the long run.

The United States is deep into a housing slump which means that a lot of people are trying to sell their home but having a difficult time doing so. There are basically more homes for sale than there are home buyers right now, which means that home sellers have to lower their asking prices just to get people interested in their home. Lower home prices mean that people selling homes are not making as much of a profit off their home sale as they’d like.

If you are trying to sell your home right now and not having much success then you may want to consider ways of using a small home improvement loan to actually help you sell your current home and actually make a little more money than you might expect. This is not as difficult as it seems.

First, home sellers should look around their area to see what prices similar homes are selling for. This can be done by simply driving around the neighborhood and looking for home sale signs, but it is better to use several different real estate websites and look for homes for sale in your surrounding area. Real estate websites will not only give you the price of the other homes for sale, but many will also list key features and upgrades the home might have as well as offer interior and exterior photos of the home that may not be seen from a simple drive-by.

Now that you have a list of homes that are “competing” with your home that is for sale, it is time to start figuring out how you can improve your home without spending much money. Look at the other homes. Do many of them boast new windows, new carpeting or new roofs? Is their landscaping new and pleasing to potential buyers? What about an upgraded kitchen or extra half bathroom? How about simple interior decor items like crown molding, new baseboards or fresh paint?

Some of these home improvement projects are not very expensive to complete and can really make a big impression on prospective home buyers. This is where you may need to look into some sort of home improvement financing or small home improvement loan to complete your projects. A loan as small as a few thousand dollars could help you change your home enough to attract and win over a home buyer. Here are a few suggestions in different price ranges:

For $1,000 – $2,000: Consider updating the interior of the home you wish to sell with fresh neutral colored paint or new baseboards and crown molding. If you have wallpaper you may want to pay to have it removed and painted a general light color. Depending on the size of your yard you may also consider spending that money to have someone remove overgrown bushes and plants from your flower beds and put in smaller more manageable ones. Simply being able to advertise “crown molding” in a home sale ad will garner more attention than you normally would get with a regular listing.

For $2,000 – $5,000: Replacing worn flooring or carpeting is a good idea at this level. Simply having your carpets steam cleaned is a good start, but putting down new neutral colored rugs or tiling will go a long way to making a great first impression.

For $5,000 – $10,000: This is for larger home improvement projects that could really increase your return on investment. When people look to buy a home they really like updated kitchens and bathrooms. You don’t have to choose the most expensive materials for these, but you do want to choose neutral colors that many different people may like. Updating your kitchen with stainless steel appliances or replacing your counter tops with any sort of granite will definitely bring more buyers to look at your home.

How do you make extra money with this home improvement loan? For all of these improvements consider raising the asking price of your home by the amount you borrowed to improve it. You may even want to add on another 20%. If you had a home improvement loan of $10,000 you may want to increase your asking amount by $12,000 to account for the inevitable offer and counter-offer process that usually accompanies a home sale.

When you sell your home you’ll quickly be able to pay off your loan with the profit from the house sale. If you don’t sell your home right away you’ll still be able to enjoy the home upgrades until you do.