5 Tips for Building or Renovating Your Home
Taking time to plan thoroughly is the best way to keep your project on track and on budget.
Building a new home or renovating an existing home ought to be an exciting and fulfilling adventure — an opportunity to create a dwelling that reflects your needs, desires and personality. It should not be a time of financial stress, constant worry or excessive conflict.
Whether you want to remodel your current home, build a new one, purchase an existing home that needs some renovation or build that vacation home you’ve always dreamed about, here are a few tips for obtaining the perfect loan program to suit your needs.
1. Make a plan.
Actually, make two plans. One, for what you can afford, and two, for what you want your house to look like.
- A financial plan includes a budget and any financing you may need. It involves a down payment as well as ongoing monthly payments. Calculate what you can afford and stick with that calculation. Have a contingency plan for unforeseen items.
- A building plan includes a very detailed list of specifications. Also called a cost breakdown, it is an itemization of how much each individual contractor and subcontractor will charge, as well as a detailed listing and cost of the materials.
2. Follow your plan.
If the financing and building plans call for laminate countertops and linoleum floors, don’t install granite and travertine. Overspending in one area of the budget creates a shortage in another, and this could complicate your financing and lead to additional stress. If your financing calls for a full basement and landscaping, but instead a home is built with half a basement and no landscaping, there may be a problem with the overall value of your home.
The same is true with your financial plan. If your financial plan allows for a new car to go onto that new driveway, great. But if you have not included the cost of this new car along with the new home, you could create additional financial stress for yourself.
3. Choose your builder, subcontractors and suppliers wisely.
Check references, obtain multiple bids and don’t feel rushed or pressured to decide quickly. You are making a significant investment in terms of money, time, effort, dreams and desires. Be sure to shop for quality and value, not just price.
4. Ensure all necessary financing is in place before you begin.
Starting construction before financing is in place can create problems, some of them catastrophic. Subcontractors could file liens against your home for the work they provided. And if you need the financing to pay these subcontractors, you could find yourself in a catch-22: You can’t get the financing because of the liens, yet you need the financing to pay the liens. Zions Bank offers financing for home remodels with a home equity credit line, or if you’re considering new home construction, consider a Zions Bank construction loan.
5. Protect yourself against mechanic liens.
Have a process in place to guarantee that everyone and everything is paid according to the building plan mentioned in Tip 1. As money is disbursed during the construction phase, workers and suppliers are not only paid in full but also give up the right to later claim additional money is owed by signing a lien waiver form. Unscrupulous contractors and suppliers can take advantage of homeowners. Take proper steps to protect yourself.
This article originally appeared in Community Magazine.