Our Two Cents

Remodeling a home is an exciting way to give your place a fresh new look and feel. Maybe you’ve been dreaming of more counterspace in your kitchen, or more modern fixtures and tiles in your bathroom.

If you’re planning to remodel soon, you may be wondering “how much does it really cost?” Your overall cost will depend on things such as the contractors you hire, the materials chosen, the condition of your house, and other variables.

Hidden or Unexpected Costs

One of the first rules of a remodel is to prepare for the unexpected. Problems (and price tags) could appear as the remodel progresses. To give you an idea of issues that may come up, here are some of the most common unexpected costs:

Bringing your home up to code: The older your home is, the more likely it is that you run into code issues while remodeling. Building codes are updated frequently and contractors are required to adhere to them or risk losing their license. Bringing your home up to code could tack on additional costs you weren’t originally expecting.

Permits: Before you start your remodel, check with the city and determine if and what permits you will need. To help save money in the end, get all your necessary permits up front when you hire contractors and set a timeline.

Surprise structural changes: Whenever you do something to reveal the internal structure of your home, you could find damage that needs to be addressed. This can range from water damage to pest infestations, or even past home improvements that were not completed properly.

Having to move out or not using rooms: Depending on how invasive the project is, you may not be able to use that room (or even your house) for an extended period. Plan for this when setting up your budget, and factor in having to put items in storage or staying in a hotel for a few nights.

Dining out: If you are remodeling your kitchen, you may be spending money eating out. To avoid this expense, try to plan and prepare easy meals that don’t need to be cooked.

Utility bill increase: Plan for some of your utilities to spike during your remodel. The use of power tools and equipment could raise your electric bill.

Planning your remodel

Before you start knocking down walls, make sure to figure out what you want to remodel and create a plan to help keep yourself on track and avoid unnecessary expenses. This should include where to start, your budget, and timeframe.

Consider the amount of work going into your remodel, this will directly affect your cost. Some projects may add equity or resale value depending on the market and location of your home. Do your research and make sure that your remodel makes sense.

Setting the budget

After you have your plan in place, it’s time to set your budget.

Get quotes from multiple contractors. Be specific and detail as much as you can; from materials to timeframes, communicate your ideas and concerns to your contractors. Use their knowledge of the industry to confirm your choices and avoid costly mistakes.

Once you have an idea of how much the proposed project will cost, come up with the amount you are comfortable with spending. Plan to add an additional 10% to 20% to act as a safety net for unexpected expenses.

Consider how you will be financing your renovations. If you are looking to take out a loan, make sure you do that before finalizing your budget. This helps determine your available funds and how much you are able to spend on your project.

Let Us Help

Remodeling a home can be expensive. That’s why we‘ve partnered with Mortgage Center to offer a cash-out refinance that can help you afford your home renovations. Apply today and one of their loan experts will help you find the perfect loan for your project.

Information as of April 2021.

Equal Housing Lender
Mortgage Center NMLS# 282701