If you’re making choices between if the return on investment down the road makes up for the astronomical price upfront, you’re not alone. While some exterior investments like a freshly done paint job for the entirety of your home can help boost even curb appeal by 80%, some homeowners just want to make a house they own their forever home. That being said, every time someone brings up a home renovation, usually a refinanced mortgage follows it up. We’re happy to let you know, this is not the only way you can help budget for your next project.
- Dip into those savings: Whether you’re a budgeting guru or have rainy day funds already covered, extra savings should and can be spent on renovations for your home. This doesn’t have to be an investment in hopes of selling your home for more than you bought it for. Even if you’ve found your forever home, you have every right to make it perfect for you and your family. The best part of paying with cash is loans, fees, interest, and more are completely avoided!
- Personal loans: Don’t get scared by the title, personal loans are relatively small in amount and can be paid back in a much shorter time frame. While the interest may be higher than your mortgage interest, it’ll still be a smaller amount than credit card interest.
- Credit Cards: Again, this idea will seem scary on face value. But the interest rates will not begin to skyrocket if you pay back these amounts sooner rather than later. Many credit cards offer little or zero interest, and paying this money back prior to this period ending can be an easy way to do this.
We’re not going to advocate for any particular loans but also want to offer some easy ways you can begin budgeting for your next project, if you use any of the above listed options.
- Set your defined budget: Shop around, get quotes for projects, and set a budget for the materials you can provide contractors working in your home! This also includes figuring out living expenses you’ll rack up while certain areas of your home are under construction. If you’re installing items, consider the installation, delivery and labor costs, before you get started.
- Provide yourself a cushion: Most financially savvy homeowners know this tried-and-true rule, save 10-20% of your available funds outside of your defined budget for unexpected costs. Regardless of how much money you’re told by a contractor the project will cost, unexpected time delays, lumber shortages, and labor shortages can increase the overall cost of your project.
- Consider purchasing previously used items: It might not seem like the first option that comes to mind, but Facebook Marketplace, Craigslist, and any local shop that allows you to buy second hand appliances or furniture! Plus, the environment, and your pocket, will thank you for it.
The debate is always split, when trying to make a home renovation dream come to life, do or don’t you refinance your home’s mortgage. The best part of this long held debate, is that it’s definitely never your only option. Even if money is tight, you don’t have to just be strategic about what you want your home to look like when you’ve already fallen in love with it. So if you’re beginning budgeting, already have, or are considering these alternatives, we hope this can help that process move along for you.