What Exactly is a Home Improvement Loan?

A home improvement loan is actually one of the simplest ways in which you can live in your dream home. This is because it is the prime option for someone wanting to enhance the appearance of their home and also add to the value. In other words, a home improvement loan pays off in many ways. First of all, your home looks great and, second of all, the investment pays for itself because the home goes up in value.

As for how you get a home improvement loan, there are a couple of ways. The first is that you can simply go to your bank and request the money. You can do an assessment of how much work you would like to do and request that amount. The second way is to refinance your mortgage and use the equity in your home to fund your home improvement project. How you do this is you refinance for the worth of your home, you pay off our mortgage, and you then take the difference between the worth of your home and your mortgage and use that money to fund your home improvement project.

Types of home improvement

You can use your loan to fund any improvement to your home. You may want to simply improve the appearance of your home or you may have worn and broken areas that must be fixed or replace. However, the loan must make sure that the improvements that are done to the home are right with the borrower’s needs and don’t exceed the amount that the borrower is borrowing. This means you need to make sure you cover all of your improvements by not deviating from your initial plan.

For example, you may wish to add rooms onto your home. Maybe you need an extra bathroom or an extra bedroom. Perhaps you want a sun porch or a sitting room where you can sit and relax for a while. It is really up to you. Maybe your plumbing needs an overhaul or you need to put more siding on your house.

Here is a more detailed idea of what you can achieve with a home improvement loan:

– Installation of central heat and air
– Installing a fire place
– Swimming pool installation
– Rewiring the home
– Remodeling any room in the house

Loan details

There are certain details of the loan that you must be mindful of. The first thing you must keep in mind is that the interest rate of your home improvement loan is going to depend on your credit rating. If you are credit challenged, you may find that getting a competitive rate is somewhat difficult.

However, there has been an increased amount of competition between financial institutions because more and more people are looking for home improvement loans. Because of this competition, there are more options for borrowers to take advantage of. There are a number of online lending services that have added to this competition, which also increases the chances of getting an approval on a home improvement loan. The process has been simplified by these entities.

But before getting the loan, make sure you get quotes on how much it would cost you. You can assess the work yourself, but you can have a professional do it even if you do decide that it is a project you want to do all on your own. This increases your chances of being able to stay within the amount the loan is for. If you exceed your loan amount, you may not be able to pay for the remainder of your improvements. But know that if you need a home improvement loan, different lenders have different options for you.

  1. Guide to Starting Your Home Improvement Project

 

So there is something around the house that could probably do with some refurbishing or a complete makeover even. Things like deciding whether to do it yourself, hiring someone, and budgeting can be a little daunting to many. Rest assured that there are a few things you can do to ensure you start off the project smoothly and everything goes according to plan.

 

Well, How Money Do You Have – Setting a Budget

 

The first thing that you need to think about before you start on any home improvement project is to have a realistic budget. A well thought budget includes setting aside an amount of money for any eventualities; this includes mistakes, any accidental damage inflicted on your home and so on. If your project is on a somewhat bigger scale than most home renovations, you can save quite a bit of costs by purchasing materials in bulk from a supplier. Of course, make sure you evaluate a few quotes before making a decision.

 

However, low cost and good quality does not always go together. Compromising on price may impact on quality. Ensure that whatever you are buying is in good condition and long lasting, otherwise, you may have to replace whatever you have bought in not time and thus doubling the cost.

 

Can You Do It Yourself – To Go Pro or Not

 

Sometimes, or most of the time, you are tempted to be the one that execute the home improvement project. After all, who know your lawn better than you? In addition, such supplies and tools can be bought at your local hardware store and you can certainly cut down on the cost immensely. However, if your project seems complicated and you do not have much experience with DIY projects, it is best to leave it to the professionals. Remember, you may save by going DIY; however, any mistake might make things costlier later on.

 

However, it is also not easy to find a good and reliable contractor. Word of mouth is perhaps the best indicator of a contractor’s quality. If people are happy with a contractor’s work, they will be more than happy to give their endorsement. Ask any of your friends who have had work done in their homes in the past that they used and whether if they were happy with the work.

 

Plan Your Timing Before You Start On The Project

 

Timing is an important factor when planning your home improvement project. Choosing the best time for your project ensures that it can be completed on schedule and with minimal interruption and if you have hired a contractor, remember that this means strangers will be in and out of your home over the next few months; this can be quite a stressful situation.

 

To minimize the stress, it is best to plan your home improvement around your life and not the other way around. Try and find a time when your work schedule is not busy (not possible for most I guess) and no one in your family has anything important such as an exam, presentation, wedding and so forth going on. Keep in mind that home improvement jobs can take longer than expected and there is nothing you can do about such delay. These pointers will help you start off your project as smoothly as it can. More importantly, have fun in the process.

 

TangoPang loves to implement wacky and creative ideas for Home. He is a professional and run a consultancy for Home Improvement projects.

Things to Remember During a Home Improvement

As remodeling projects surge, there is a huge demand for home improvement and remodeling contractors. But not all projects meet their logical conclusion. There are many horror stories about remodeling projects gone wrong. Here are a few things that you ought to know before you embark on a home improvement project:

– Hiring a Contractor: A general contractor is one who ensures that an architect’s plans are carried out flawlessly. He/she arranges for the materials required for the job, the skilled/unskilled workmen, and also taking care of other minor issues like contracting insurance etc. He charges a fixed price-usually 15-25 per cent above the cost of materials and labor. However, this would largely depend on the nature and the complexity of the job. You can save on these costs by acting as a general contractor for your project. But this isn’t a job for the faint-hearted. There are a hundred things to be taken care of, and a hundred worries to address. More often than not, it becomes very difficult to hire an architect who agrees to work with you.

– Before you hire the contractor, make sure you speak to the references and are convinced about the quality of their work. Friends and family members can also help you with references. You can also choose to hire them through online reference sites like Angie’s List.

– Decide on the work on that you want to carry on. Would you like to carry on an exterior, or an interior work? If finances are an issue, consider only the exteriors. It may take anywhere from three months to more than a year to complete the project.

– Finance is a concern, but don’t cut a corner just to save money. People often end up ‘penny wise and pound foolish’ when they buy cheap and unwarranted things. You often end up spending more money than you would have saved, had you gone ahead with the costs. But yes, quality products can be recycled to be used again. Paint and tiles are among the list of things where it isn’t prudent to cut costs. The same goes for employing professionals. Jobs like electric wiring and plumbing aren’t meant for every DIY enthusiast. It’s best to go for professionals with the best qualifications.

Choosing a Contractor for Home Improvement

When done with care and caution, home improvement and remodeling projects add value to your home. But if have ever been involved in such a project, I’m sure you would agree that it is indeed challenging. The most important part of the job is to find a contractor who can carry on with the job seamlessly and efficiently. Here are a few pointers to help you find the right contractor:

1) Ask for referrals: If you have engaged an architect to design and supervise the remodeling, he can help you assess the contractor’s qualifications and verify his claims about past performance. Architects work in tandem with contractors during home remodeling projects, and hence are a good source to ask for references. You can also ask for references from friends and family; preferably someone who has completed a home project within the last year. Their experience with the contractor can help you zero in on the right professional.

2) Credentials: Ensure that the contractor is registered and possesses the required licenses from various state and local bodies to undertake home remodeling. A licensed construction company ensures that his employees are covered under the Worker’s Compensation Act, thus protecting you from liability in case of a problem. Make sure to verify for contractor certification issued by the city’s contractor’s licensing authority/board, and the liability insurance certificate. Reputed contractors usually provide these details without asking.

3) Check references: The internet is a great source to help you find a contractor of your choice. People are honest about their experiences and provide candid feedback about the job. There are plenty of sites that provide information and reviews about contractors. Of course, word of mouth is still the best source, but if you are starved of time, this is ideal. Besides, you can always check with the Better Business Bureau to know if there are complaints filed against the general contractor.

4) Obtaining Written Estimates: Professional contractors provide a written estimate of the job, thereby allowing you to compare between the different quotes. And these quotes are always comprehensive to include the cost of raw materials, service charges and other miscellaneous charges. Make sure that you obtain a quote from at least 3 contractors.

5) Interviewing Prospective Contractors: Once you’ve made a list of prospective contractors after checking for their references, quotes and experiences, make sure to set up a meeting where you can discuss about the details of the project.

Finding the Right Home Improvement

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Renovated homes always increase the value of a home. It is estimated that Americans spend around $114.6 billion on home renovation projects with an average construction project costs anywhere around $45,000. The scale of work ranges from simple carpentry jobs to adding/remodeling bathrooms or kitchens or even converting rooms. With so much investment, it indeed makes sense to choose home improvement and remodeling contractors with care.

Statistics at the New York Times Department of Consumer Affairs reveal that complaints about home improvement contractors far outnumber all other categories. Here’s a quick guide to help you find the right contractor:

“Construction home improvement business”

– The first thing before hiring a contractor is to make sure that he has a license. Almost all states follow strict guidelines before issuing a license. Contractors are required to clear criminal background tests, written examination, and are charged a license fee. In some places like New York and Nassau, they are even required to pay a bond through a trust fund which is used to compensate consumers who were affected by shoddy and less than professional work.

– Licenses may not be a complete guarantee of the contractor’s professionalism, but at least they give the state to move on behalf of the consumer.

– Make sure that you read the contract terms and conditions in detail. Even the smartest people have faced problems because they failed to read the contract. Paying a contractor in cash also isn’t a good idea, because more often than not, it ends up in a dispute.

– And if possible, consult an architect or other specialist. People often ignore this. Homeowners are not always specific about conveying ideas to the contractor. This can sometimes prove to be a costly mistake and even involve changing the entire project. But an architect can ensure that the message is conveyed to the contractor clearly. The blue print drawn by an architect leaves little room for mistakes, because you can’t have a contractor who can come with excuses saying, ‘you didn’t tell that to me before’.

– Make sure that a penalty clause is included in the contract. As stated earlier home improvement and remodeling jobs aren’t cheap. A penalty clause would bind the contractor in finishing the project on time.

– You can also ask the contractor to provide an experienced foreman to handle the project. While this may increase costs, this would indeed be a bargain when compared to the expenses incurred because of inadequate supervision.