Are you sick of seeing those avocado green appliances in your kitchen? Your family room's wood panelling and shag? The fibreglass tub enclosure in the guest bathroom was old and worn. The whole country is getting into home improvement. About half of fixer-uppers are done by the owner himself or herself, while the other half are done by a contractor.
So how do you know when to move, when to stay put, and when to remodel your home?
"The American Homeowner Foundation says that moving will cost at least 10% of the current value of your home. In other words, if you can fix up your home for less than 10% of what it would be worth if you sold it, it makes sense to stay there and fix it up."
You can start making changes to your home in a few different ways. A traditional home equity loan might work for you if you have enough equity built up to cover the total cost of the project. A better interest rate is often one of the benefits of home equity loans. You might even be able to cut your mortgage payment while making your home worth more.
A home equity line of credit gives DIYers the freedom to work on several small projects at once. Based on the value of your home, the lender sets up a line of credit. The gives you checks or a credit card that you can use to take money out of the account as you need it.
Lori Vella, a senior banking executive, says that if you want to refinance your home, you should just make sure it makes financial sense. "Investing in home improvements is almost always a good idea, especially in the current rate environment. Just make sure you'll be in the house long enough to cover the cost of refinancing "says Vella.
Remodeling Magazine did a survey in 2004 to compare construction costs to the likely return on investment (ROI) when the house is sold. RM sent out 20,000 surveys to appraisers, salespeople, and brokers. Those people who work in the industry got 356 responses (a 1.78 percent response rate).
The RM survey found that small kitchen remodels bring back 92.9 percent of your investment. New siding comes in close second at 92.8 percent. The survey also says that adding bathrooms, bedrooms in the attic, decks, and family or sun rooms can be good investments. Most of these renovations gave the owners back between 80% and 90% of what they put into them.
One of the best ways to increase the value of your home is to remodel it. With a home-equity loan, you might be able to lower your mortgage payment, lower your interest rate, and add thousands of dollars to your net worth by remodelling your home.
If you want to make your home more energy efficient, don't forget to check with your local utility company. Most have a mortgage programme that is good for the environment.
If what you want to do is buy a house that needs work, HUD has a programme called 203(k) that makes it easy to get a loan for both buying a house and fixing it up. The HUD 203(k) programme can be used through most mortgage lenders.
