Effective Steps for Remodeling Your Home without Falling into the Debt Trap

Effective Steps for Remodeling Your Home without Falling into the Debt Trap

Homeowners must consider remodeling their homes without ruining their finances and falling into an undesirable debt trap. We understand that over one-third of the homeowners have a tough time staying within their pre-determined budget for their home renovation project. 91% of the homeowners are intending to pay cash for their home renovation, at least, a portion of the total costs. Almost one-fourth of the homeowners are happy to use a credit card for paying their home remodeling expenses. Home renovation should not end up demolishing your finances. 

While undertaking your home remodeling project, the cost could be a major concern because you would not like to end up accumulating overwhelming debts simply because you went berserk while renovating your house. It should be your top priority to boost the overall resale value of your house but at the same time, focusing on minimizing your home remodeling costs. Homeowners encounter a major challenge. They need to stay on budget while giving a new lease of life to their home.  

A home remodeling project could prove to be both stressful and at the same time, quite exciting. Depending on your remodeling plans, it could prove to be an exorbitant affair if things are not planned in advance and with utmost care. Here are some effective expert tips for succeeding in renovating your house but without breaking the bank or falling into any debt. 

Reasons for Remodeling Your Home

There are several reasons for sprucing up your home. Let us explore the top reasons to remodel your home: 

  • Sprucing up your home is long overdue. Your home has started to look old and haggard. Since you wish to enjoy living in your home and feel proud of your haven of peace. 
  • You are considering selling off your current home and so you need to focus on enhancing its overall look.
  • The family has undergone remarkable changes and so the home remodeling is supposed to be a good idea. You need to revamp your home if a parent has decided to shift to the basement apartment or even when kids are spreading their wings and moving out. 
  • There are certain existing limitations in the present layout that requires being modified enjoyment, entertainment, and practical use of your home. 

As per https://www.forbes.com, you need to choose the right home remodeling contractor. It involves a dedicated process to identify the right contractor for the job. You may be quite tempted to opt for the very first one you come across to quickly finish the process. However, in reality, if you end up choosing the wrong contractor, you could be in real trouble in the future.

You need to do your job with devotion and dedication. Talk to multiple professional and experienced home renovation contractors before making the right choice. As tradition demands, you must obtain a minimum of three estimates from top renovation contractors in your locality. Examine meticulously the three estimates and after going through the online customer reviews, and references from family and close friends, you could take the right decision and choose the contractor that best suits your purpose and unique requirements. You must hire the services of the contractor after verifying that he is insured and bonded. Make sure that he is not overcharging. You have to constantly keep watch over your overall remodeling expenses so that you do not end up accumulating overpowering debts. You may get in touch with the debt relief specialists at NationaldebtRelief.com in case you are already grappling with some debts.

Home Remodeling Steps

Do Ample Planning & Stick to Budgeting

You need to do proper remodeling planning. Whatever the reason to revamp your house, you must have a solid plan to carry out the remodeling exercises step by step so that all your home decor dreams and aspirations are translated into reality. It is of pivotal importance to properly plan your home renovation project. You must know precisely what you are looking for. You must chalk out a remodeling budget as per your unique requirements after meticulous research and consulting some experts. Once you have chalked out a suitable budget, you must have the perseverance and the dedication to stick firmly to the budget so that you do not end up accumulating massive debts. You must consider budgeting for unanticipated issues and expenses. You must allow a minimum of 10% cushioning for the unanticipated expenses.

Make a Thorough Assessment of the Investment

If you are thinking of moving within just a year, remodeling might not promise an amazing ROI. Whatever money you end up in renovating the house would not be projected in the added value of the house. You must start your home remodeling project once you are sure that you do not need to sell off the house immediately for tackling your debt. You must opt for economic or cost-effective remodeling plans but ensure that your house is on par with the other houses in the locality. For instance, if your house does not seem to have two bathrooms, it could be a wise idea to add a new bathroom to boost the house’s overall resale value. However, you need to understand buyer psychology. They would not like to pay more just because you chose granite countertops as opposed to laminated ones belonging to your neighbors’ houses.  

Consider Building Your Savings for Renovating Your Home

More than one-third of the homeowners admitted that they waited to start their home renovation project until they were able to build up substantial savings precisely for this purpose. Over 9 out of 10 homeowners are determined to pay at least, a portion of home renovation costs from their savings in cash. As per an experienced and qualified financial planner that seems to be a smart move.

If a homeowner is getting his renovation project financed since he did not have enough savings, he must think seriously about how he would be organizing extra funds for making the debt repayments and if he would be able to fulfill his savings aspirations and goals with fewer amounts left in the budget.

Conclusion

You must essentially follow these steps if you wish to do your home renovation successfully without falling into the unwanted and stressful debt trap. However, you must also consider comparing financing options that are available to you. It is a good idea to consider shopping around to grab the best possible deal. If you follow the above steps you could do proper home remodeling without worrying about ever-mounting debts. However, in case you are short on cash, you could tap your home equity and take out a line of credit or loan. You could alternatively borrow from your 401(k) but this should be your last option to make sure that your retirement plans are not ruined.

Leave a Comment