If you want to embark on a home improvement project, you might have a few ideas in mind with regards to what you want. However, while your ideas might be practical and doable, you need to factor in the cost of the project. To make things easier we prepared a guide to budgeting for a remodel:
Here are tips you can follow when budgeting for a remodel.
Project the Cost
Start off by estimating the cost of the remodeling project. For instance, if you want to redo the bathroom of your home, be prepared to spend up to $200 per square foot, or sometimes even more, depending on your requirements. The best approach is to talk to your contractor about the projected cost for the remodel job.
Assess Your Finances
Firstly, you need to figure out how you will pay for the work. This is fairly straightforward if you are paying in cash, as you will have a clear idea of how much you can afford to pay for it. On the other hand, if you plan to borrow, you need to work out the amount you will have to pay on a monthly basis. Here, you can select from a home equity loan, a line of credit based on your home equity, or a cash-out refinance. You need to know the finer details of the loan agreement, based on the cost of the job and the amount you have to borrow. This way, you will know whether you can afford it or not.
Specify Your Requirements
It is important that you are clear about the materials you want to use for the job and the areas of the home that you want to remodel. This way, you can discuss your needs clearly with the contractor you are working with.
Get Quotes in Writing
Continuing from the previous point, once you have specified your requirements, get quotes from different contractors, in writing. Make sure the quote is in writing as it becomes legally binding. Moreover, by getting quotes from multiple contractors, you can make sure you are getting the best price. This will also ensure you don’t have to bear cost overruns once the project commences.
These are some tips you can follow when budgeting for a remodel. This way, you will not only be clear about the cost of the project but at the same time, be safe from costs exceeding the budget you have in mind. After all, you need to know how much remodel you can actually afford.