How to decide if a home remodel makes financial sense for you
(BPT) - There comes a time when every homeowner looks around at their house and ponders a few upgrades. Sometimes, those ideas turn into full-on renovations as you reimagine your space to better meet your lifestyle. But before you start calling contractors, ask yourself: Does remodeling make financial sense?
Here are three tips to help you decide if a home renovation benefits your home and your finances.
Identify your wants vs. needs
How necessary are the improvements you want? Some home projects may end up costing you more than the value they provide. That doesn't mean certain projects aren't worthwhile.
“Home renovations come in all shapes and sizes. For some, it may be about the investment and increasing the home value, for a good few it might be about what looks the best, while others might not have a choice,” said Adam Fingerman, assistant vice president of equity lending at Navy Federal Credit Union. “Whatever the reason, it’s always a good idea to understand how a large renovation might impact your finances and the overall value of your home.”
Know your budget
Consider creating a chart with all of your cost estimates, and include columns for high-, medium- and low-cost options. Don't forget supplies for do-it-yourself projects and always allocate a certain percentage for unexpected expenses.
Also be sure to get estimates from different contractors and compare them. Carefully check references and business licenses.
Explore financing options
Ideally, you've already established a home improvement savings plan. But if you're planning to borrow, explore your financing options through your trusted bank or credit union.
“Think about the size of your project, whether or not you'll have ongoing expenses, and your current finances,” said Fingerman.
For example, Navy Federal offers members various options for funding home improvement projects, such as home equity loans, home equity line of credit or personal expense loans. Members also have access to a wealth of information to help them make informed decisions about the right financing products for their home improvement goals.
Home renovations of any size — large or small — can be overwhelming. Consider these tips to help make it easier and more affordable in the long run.
Navy Federal Credit Union is federally insured by NCUA. Equal housing lender.