Home Improvement Solution

Posts Tagged ‘Home Improvement Project’

O.K. you want to add a hot tub to your home to enjoy your evenings outside with your family and friends. You have cash sitting in your bank or you have a few credit cards that you can tap into to finance your home improvement.

What is the best option? Should you get a Home Equity Line of Credit? Making the right decision is based on knowing various pros and cons of different ways to finance your home improvement project and your current situation. Even if you have cash sitting in the bank, it may not always be the best option.

If you have cash at hand, it should be earning at least 5% in a savings account. If you are not earning 5% from your bank, dump them and go to a bank that will give you at least 5% on your money. Search the Internet and you will be able to find a few online savings accounts, offered by well known banks like Citibank, Emigrant bank or HSBC that will give you a 5% return on your deposit.

If your credit is good and the project is small, search for a credit card that will give you 0% interest rate for a year. Apply online and get approved instantly. Within a couple of weeks, you will get your card and you will be able to use it for your home improvement project. When you get a loan on 0% interest rate, make sure that you do not miss a payment. To avoid missing a payment, use online payments offered by many banks for free or the online payment option of the credit card company.

If your home improvement project is a large one and you want to do it in stages, HELOC, or Home Equity Line of Credit, is a good option. Search the Internet to get the best rate. Find a bank that not only offers the best rate but also waives the finance charges. When you take a HELOC loan, you are essentially putting your home as collateral and the interest you pay may be tax deducible.

Refinancing your home is a good choice if you have a large equity in your home or you want to reduce your existing mortgage rate. Also, if your home improvement project will add substantial equity to you home, refinancing is an attractive option. You will also get tax benefits on the interest you pay.
Obtaining a second mortgage to finance your home improvement project makes sense if you get a low fixed interest rate and the interest rate on your first mortgage is even lower than the second mortgage. A second mortgage involves less paper works than a full refinancing.

Don’t make a decision on haste. Weigh the pros and cons of various methods discussed above and your current situation. Find the best way to finance your home improvement project using other people’s money and without hitting your pocket book hard.

Some homeowners find it necessary to apply for home improvement loans because they may lack the necessary budget or donâ??t have enough savings to finance their home improvement project. Even a secured personal loan may serve as a source of home improvement loans.

In the US, it is possible to get home improvement loans either for projects that you hired a contractor for, or for do-it-yourself projects. Some lenders stipulate that their company will be responsible for releasing the checks representing the amount to be paid to the home improvement supplies company or to the contractor. For do-it-yourself projects, the lender may send the check to the home improvement supplies company instead of giving you the money outright.

If you prefer getting a lump sum, you might apply for a home equity loan which means your home will be assessed by the lender for the amount of equity it presently has and the corresponding value of the loan you (and your home) qualify for. A home equity loan is advantageous because the payments are stretched out over a longer pay period. $50,000 loans to remodel your home fall under this category â?? meaning, you will be granted a loan of $50,000 if the lender believes your home has at least that much in home equity left in it. This is a good strategy to pursue if you want to make your home increase in value for the long term, because the loan allows you to make necessary repairs and upgrades of your home. In effect, you can command a better price for your home later on.

If you are trying to get a federal grant, you may want to examine the Title 1 loan offered by the Federal Housing Administration under the Home Mortgage Insurance Division of the Office of Housing of the HUD. Although the HUD does not itself offer home improvement loans, the Federal Housing Administration may help you find a lender who will lend to you (provided the lender is accredited with the HUD.)

Some cities in the US offer a city rehabilitation loan program to homeowners in the low-income wage bracket so that they can undertake home improvement necessary to keep their residence livable. These loans require repayment at low interest rates, though. Check with your city government regarding how long it takes to apply for the loan, and the particulars about how it works. You should also inquire about who gets approved for such loans and where to apply.

Regardless of what loan you get, you may have to get acquainted as well with the process of finding an approved contractor. Some contractors operate without accreditation, since not all homeowners are so particular about who they hire. The advantage with hiring an accredited contractor is that the contractor is required to adhere to certain standards in the way he runs his business, which gives you more peace of mind, knowing that you can always file a complaint against the contractor and his company if he doesnâ??t do the job right.

Hiring the right contractor will probably be the most crucial decision you make after making the initial decision to renovate your home. More important than the color of your bathroom tiles or the type of flooring you install in the kitchen, your contractor will oversee your entire renovation project, hopefully keep you on budget, manage any hired workers, and act as your professional quality control. The work of an inattentive contractor can result in a project that runs weeks beyond its deadline and thousands of dollars over budget. That would be a formula for failure!

This is why it’s so important to select a reputable contractor. But how do you do it? Keep reading for some easy tips on how to hire the best home improvement contractor.

1. Come Prepared with a Plan

Before you even begin to search for a home contractor, develop a solid idea of what you want to accomplish with your home improvement project before you start. Consider, though, that a contractor is not a designer, so begin a project with your own ideas about how in the end you want the final outcome of the work to look.

Taking that initial step will make it easier for you to set a budget and for your prospective contractors to give you an accurate quote and project timeline.

2. Obtain Contractor Referrals

Ask your friends, family, co-workers and neighbors for contractor recommendations out of their own experiences – whether positive or negative. If, for example, your prospective contractor did a wonderful job on your sister’s house, then chances are he’ll do a great job on yours as well.

Also, don’t be afraid to ask any prospective home improvement contractors for references that you can actually call. If the person you are considering for the role is a high quality professional, then there should be no problem supplying you with the names and numbers of other satisfied customers. Once you have secured those references, make the calls!

Another avenue is to type your contractor’s name into an online search engine and see if any negative or positive reviews pop up in the search results. For example, “John Smith contractor references.”

3. Don’t be Timid about Asking Questions

When interviewing a prospective home improvement contractor, don’t be afraid to ask a lot of questions, and make them the right questions.

Inquire about details of their contracting background and how it relates specifically to your project. For example, if your project includes a major overhaul of the deck and backyard, verify that they have experience managing landscaping projects.

Ask your potential renovation contractor how improvements might be made on your prospective plan and changes necessary to complete it under budget. An experienced contractor should be able to take a brief look through a plan and offer a number of practical suggestions.

When he presents you with a time estimate, always ask how that timeline was derived and what work will be completed in each phase. A knowledgeable contractor will have reasoning behind why he’s pegged this particular project at 6-8 weeks.

Finally, always ask to see a portfolio of previous work. The additional work to ensure you have an experienced and reliable home improvement contractor will be well worth the effort in the end.