Adding to a home can be a huge project in both financial and physical terms. There are walls to tear down, air conditioners to install, and many other technical jobs to perform. It is important that you have a good financial plan to make extensions at home.
Here are some steps to help you budget for renovations.
- Make plans for your extension project. It is important to organize every detail of your project. Have an appraisal of each item in your home that you are about to renovate based on the value of your home. If you take a loan for your project, the lender will ask you about specific schemes. From this first step you will know if the project fits your budget.
- Get estimates. You can do this by hiring a construction company. Do not forget to explain the considerations and parameters of your project. Provide the company with waiting spaces in which they will work. Compare with several companies for the best price.
- Manage your savings. It is estimated that you have to take some money out of your reserves, but this is not something to be afraid of. The advantage of using your own savings is that you do not have to pay any interest. It is advisable to take only enough. If you plan to use a loan provider, the amount would be less charged.
- Some credit cards offer the zero interest program. Find some information about it. It is a quick way to provide loans for your project. Credit card companies also suggest rewards programs for you to take advantage of, but some of these programs have high interest rates. Make sure you have read the terms and conditions carefully to avoid being hounded by the debt collector once you have finished your extension project.
- Use the home equity loan to finance your renovation project. It generally has a lower interest rate than many other financing programs. If you want to sell the house before paying off the loan, reducing the equity in the house can deplete the return on your investment.
- The best and cheapest way to get an extra budget is to ask your family and friends to invest in your home additions. With them you can do small jobs like remodeling and cleaning furniture. But be careful not to break anything, because the cost of hiring someone again can cost you twice as much.