5 Tips for Your Next Home Improvement Project
Consider this advice when financing a remodel.
If you’re dreaming of a remodeling project in your home, you may be thinking about tapping into your home’s equity, especially in light of improving home prices. The rebounding real estate market is giving homeowners the opportunity to recoup the money spent on home improvements when they decide to sell.
If a remodel is in your future, consider the following tips for identifying the smartest home improvements and the various ways to finance them:
1. Check the Cost vs. Value report.
Compare the construction costs of individual projects to estimates of their resale value. In times when homeowners were undertaking fewer renovations, contractors may have been hungrier for business and more willing to negotiate price. That’s not the case now that construction has picked back up, so it’s important to look at what projects will give you the most value for the money you spend. You can check the Cost vs. Value report
here.
2. Think about your project time frame.
Will your project be one large change, or several smaller improvements over time? Knowing your project time frame allows you to choose the best financing option for the job.
3. Explore online resources.
Zions Bank has a wealth of online resources to assist in your research. A great way to do some initial calculations is by using a home equity loan calculator. In our Home Loan Center, we offer a tool that walks visitors through a series of questions to help determine what type of loan might suit them best. We also offer answers to home financing questions at our online Homeowner’s Café.
4. Tap your home equity the smart way.
Consider a traditional home equity loan if you have more than 20 percent equity and you’re planning a single, large project such as a new roof. A home equity line of credit may be better for projects that will require access to funds over time.
5. Talk to your lender.
There are benefits to each type of mortgage or refinance loan. Your unique situation is taken in to account, whatever that may be. Ask the lender what qualifications and education they hold, and for previous client references. Also ask a prospective lender how and how frequently they will keep you informed about your transaction. You are putting your trust in both a person and the institution they represent to help you through the process.
Getting a loan that isn’t right for your situation could cost you more in the long run than that attractive interest rate.