Know Your Needs-Know Your Credit
Before you can really figure out how to remodel a home, or how you’re going to pay for it, you need to know what your house really requires. Do you need that extra bedroom, home office or kitchen remodel, or is it something you only want?
Determining your needs versus your desires can help you keep costs down on a home remodel. There are compromises to be made, and unless you have an unlimited budget, thinking about them early in the planning stages can help.
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What’s Your Cash Budget?
Paying for as much as you can in cash is often a wise decision when renovating your home. While you don’t want to overextend yourself, credit card interest can be a killer on big renovation projects.
Sit down and figure out how much you’ll be able to pay in cash right off the top. Think about putting five-percent of that amount aside for any emergencies that may come up during the renovation job.
What About Credit?
Credit can help you get a home renovation done when you can’t pay everything in cash. In some cases, it could even help your overall credit score to finance some things if you have much credit available.
Another option is to refinance your house or take out a home equity line of credit. Doing this is often preferable to interest rates on credit cards, but you might be subject to a set interest rate that you have to pay over multiple years.
Talk with your lender about refinancing deals for homeowners who want to make improvements to their homes.