Cash-out Refinance and other Ways to Manage the Costs of Home Renovations

Remodeling a house can truly transform its entire look and feel for the better, but upgrades aren’t always cheap. If you’ve been considering a home renovation, here are some things to consider and tips to help you save.

Research
Planning before you start the remodeling process can help save you a lot of time and money. No matter what kind of renovations you have in mind, do plenty of research on the estimated costs, time frame and supplies that your upgrades will require.

You should also determine whether or not you’ll want to hire a contractor. While a contractor may seem pricier than a do-it-yourself project, consider your experience and skill level – if you make a mistake, it could end up costing more to fix than if you’d originally hired a contractor. Check out Porch.com to find renovation professionals near you.

Keep in mind that not all home improvement projects are equal, profitability-wise. Certain upgrades, like revamping the kitchen or adding a deck, are likely to pay off more than others in the long run. If you are planning to sell your home in the near future, you may want to avoid projects that don’t add to your home’s resale value.

Budget
Create a budget for your remodeling goals and stick to it. This should begin with you reviewing your current financial situation in order to see where you stand and what you can truly afford.

Once you have your budget figured out, don’t plan to spend every cent on upgrades — at least 20 percent of your budget should be set aside for unexpected expenses. Once remodeling begins, surprises can arise, and you’ll want to have money put away to help cover any unexpected expenses. If you find your home needs more work than your current budget allows, consider a cash-out refinancing as an option. Cash-out refinancing lets you turn a portion of your home’s equity into money you can use however you want, including to remodel your home. A PrimeLending home loan expert explain the process and help you determine whether refinancing makes sense for you.

Shop Around
You don’t have to limit yourself to just one or two home improvement stores when you’re remodeling – there are plenty of places where you can find good deals on supplies. Browse online at sites like Freecycle.org for materials, or visit a Habitat for Humanity ReStore, which resells home improvement and home décor products at prices much lower than retail stores. You can also go to building supply auctions.

To find bargains on appliances, keep an eye out for holiday sales (Realtor.com has some great tips on when the best times are to buy appliances). Sites like Groupon often have coupons and promo codes for appliances that can be used both in-store and online. If you’re OK with buying gently-used appliances, see if there are any used appliance stores near you or check out sites like Craigslist. Some big-name retailers, like Best Buy, also offer open-box, pre-owned and refurbished appliances at discounted prices.

Buy Ready-to-Assemble Cabinets
Cabinets aren’t cheap to install, especially if they’re custom. On average, the cost to install kitchen and bathroom cabinets is about $4,561, according to HomeAdvisor.com. However, ready-to-assemble cabinets are often much less expensive, and come in many different design styles to choose from. You can find these at most home improvement store. Alternatively, you can buy unfinished oak cabinets and paint them on your own.

Consider Making Smaller Changes Instead
If the time isn’t right for big changes, why not tackle smaller projects. Sometimes a room just needs a fresh coat of paint or updated lighting to look new again. Rather than a floor-to-ceiling renovation, decide if some superficial décor changes could make your home more livable and loveable. For example, if you’re planning on remodeling your bathroom, consider how it would look with some added shelving, a different paint color or new cabinet knobs. In the kitchen, updated appliances, new barstools and new ceiling lighting can help provide a modern-looking transformation.

What are you waiting for? Whether you have a lot to spend, or just a little, with careful planning and smart spending, you can make changes to your home that won’t break the bank.

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