Spending more time at home – It might be time to remodel
For the past several months, many of us have found ourselves spending more time at home due to the COVID-19 pandemic. Whether you have had to quarantine, or set up a home office or online school space, you are probably suddenly aware of the ways your house could function better with a few changes. If you visited the recent , you probably came away with ideas and inspiration to make some home improvements of your own.
Here are some tips to help you navigate your remodel, even in a pandemic.
1. Prioritize your wish list for time, cost and impact
You may have been itching to remodel your bathroom, but since the pandemic hit, your priority may have changed to accommodate more immediate needs. According to the , there is an increased demand in home offices/work spaces, sun rooms, classroom/playroom areas, workout space, expanded patios and outdoor sheds. Even kitchen remodels are on the rise as families are eating at home more often than going out to eat. “At our Fall Parade of Homes event, visitors saw several examples of these trends, including home offices, covered patios with outdoor fireplaces, finished basements and home gyms,” said Heidi Zich, CEO. As you put together your budget, be sure to prioritize your improvements based on what will impact your living arrangements the most.
2. Consider how improvements will affect the value of your home
One of the biggest misconceptions people have is that the value of your home will increase based on the amount you invest in the remodel. “If you are putting a $60,000 sunroom in a neighborhood where most homes are valued at $115,000, it is unrealistic to think that your home will increase in value by $60,000. This is an example of over-improving your house,” said Lynn Miller, Mortgage Loan Originator at Community First Credit Union. She encourages member-owners of the credit union to balance the return on investment with what will benefit you personally. “If it is something that you will really love and use right now, it might be worth the expense,” she added. She also clarified that home repairs such as new siding, windows, or a roof are considered maintenance and do not necessarily increase the value, even though they might make your home more sellable.
3. Keep track of availability, costs and schedules
Now is a great time to take advantage of low loan rates, but disruptions in the supply chain and high demand have caused prices of many supplies to increase. For example, the cost of lumber is up 30% currently. With uncertainty surrounding the pandemic and its impact on the marketplace, the prices continue to fluctuate and the availability of products or contractors may push your project timeline out. Do your homework, get competing bids, and comparison shop for supplies. Keep your notes in a detailed journal to make your process as smooth as possible.
4. Build extra time into your schedule for longer lead times
You’re not alone in wanting to do some home improvements. Fueled by high demand and low loan rates, home improvement loans, sourcing building materials and scheduling contractors are all seeing longer than normal timelines. “Low loan rates make this a great time to borrow for home improvements, but has also created a wait of four to six weeks if an appraisal is needed. If you’re planning to finance your remodeling project with a home equity loan, we will make sure you know what to expect and what information to gather to streamline the process,” said Miller. All of these things need to be considered when creating your timeline. “Do your homework, ask your subcontractor(s) for references, spell out specific timelines and continue to communicate with them to keep everyone on track,” she added.
5. Choose the best financing option for you
Unused vacation and entertainment dollars are getting reallocated to home remodeling projects. Even with the reduced expenses, some people are choosing home improvement financing to keep an emergency fund in place. This also protects you from running out of funds if costs are higher than predicted. Choosing the option that will set you up for long-term financial stability is something that you can plan for with online loan calculators or by seeking financial advice from a trusted advisor. Some of the financing options with lower loan rates include:
These loans allow you to borrow against a portion of the equity that you have in your home to make a single large purchase, and can also include debt consolidation. The amount you borrow depends on your equity and the home’s market value. Home Equity Loans are currently offering record low rates and offer a quicker turn-around than some loans. “The 6-year home equity loan is popular right now because of its low rate and closing costs, and payments that can be amortized up to 30 years,” said Miller.
Home Equity Line of Credit (HELOC) allows you to draw on the line of credit as you need it, giving you easy access to cash for a set period of years. The payment is based on your loan’s outstanding balance and often has a variable rate. If you don’t need a large amount at once, you might consider a HELOC to allow you to borrow only what you need, as you need it.
As we hunker down for fall and winter, you might find that a remodeling project is just the ticket to riding out the storm. Whether you decide to remodel your kitchen, add an air filtration system or smart touch-free technology, expanded office and learning spaces, or a home theater, being at home more often means you get to enjoy your investment. When you have found your inspiration, choose the supply, contractor and financing partners that will help you make it a reality.
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