Scenario: Low interest rates, available contractors and remodeling recovery. Project: Remodel!
Many homeowners in Manassas, Fairfax, Alexandria and Arlington are taking advantage of low interest rates to re-finance their homes. Sometimes, creative refinancing can result in an additional sum of cash as well as a reduced monthly payment. With the subtle improvement in the remodeling industry, and a more positive outlook, remodeling projects are bound to gear up.
While cash is the best way to pay for a kitchen or bath remodel or a sunroom addition, there are many other options that are sensible and safe. Home improvement loans are the front line for many would-be remodelers. Now is the time to get these loans at a lower interest rate, and the interest payments may be tax deductible. Other options include a home equity loan or second mortgage, or a home equity line of credit. The latter can be complicated because it carries a variable interest rate and is also open-ended, requiring good control of expenses.
Your remodeling project should include good expense control. Currently, some building materials are low in price because of the recent market slump, and they will continue to be at an all-time low. Additionally, contractors’ pricing is still at a low point, but as the recovery grows in strength, the pricing will increase. To keep expenses under control, the National Association of Homebuilders (NAHB) recommends planning to spend only 80 percent of what you can afford. The additional 20 percent should be reserved to cover any problems or changes you might not have anticipated. NAHB also recommends staying focused on the current project plan, and work to the plan. Unplanned changes cost money that can add up quickly.
If you are creative about your budget and your financing source, you can have that dream home addition now, rather than later.