4.29.20

Should you renovate now?

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Interior of house stripped to floor and drywall
Consumers home loans

Consumers helps more than 1,000 members finance land, first and second homes, and home improvement projects each year. We’d love to help you with a mortgage or home equity line of credit. Contact us!

Learn more

Three questions to ask before you start a home renovation project during the coronavirus outbreak.

COVID-19 shelter-in-place orders have forced everyone to stay home, drawing household issues to the attention of many homeowners. The kitchen feels cramped, doesn’t it? The bathroom last done in 1997 could sure use an update. And, that roof replacement really is overdue. If you’re considering a home renovation project, here are three questions to ask before you start.

How long are you planning to stay?

In general, the longer you plan to stay in your home, the more sense it makes to do renovations because you’ll get to enjoy them longer.

If you think a renovation will significantly increase your home’s value, consider these facts from Remodeling Magazine’s 2020 Cost vs. Value Report: The overall cost-to-value ratio stands at 63.7%, down from last year, and well below the decade-high of 71.2% in 2014.

These stats don’t mean you shouldn’t upgrade your home. It just means you won’t get all your money back from a future buyer. If you’re looking for the highest return on investment, projects that boost curb appeal—like stone veneer, a new garage door and replacing siding with fiber-cement material—recoup the most money.

Also keep in mind that while you won’t get 100% of your renovation money back on a sale, things in need of replacement may turn off prospective buyers. If a quick sale is important to you, this should be factored into your decision. A conversation with a real estate agent who specializes in your area could help you decide which projects are worthwhile in your neighborhood.

How will you pay?

If you have an emergency fund that covers six to 12 months of living expenses and savings to cover the renovation, you’re in an excellent financial position to start renovation work. (Check out our guide for hiring contractors.)

Are you planning to borrow to pay for repairs? Then give careful consideration to your job security. Job loss due to COVID-19 would make it difficult to cover basic expenses, as well as the extra loan or credit card payment.

If you’re confident in your ability to repay a loan, consider a home equity loan or home equity line of credit (HELOC). Rates for these loans are usually lower than credit card or personal loan interest rates.

What will a delay cost?

In many cases, an ounce of prevention is worth a pound of cure. A leaky roof isn’t just a nuisance; it can lead to bigger problems like mold and rotted framing. Putting off an HVAC system replacement could leave you and your family sweating or freezing. Who wants this kind of trouble when working and schooling at home?

Putting off renovations that will cost more down the road doesn’t make sense if you can afford to do them now.

If your primary reason for renovation is to update your home and you have concerns about the economy, it might be better to delay the project. In this case, delay costs you nothing.

Also, depending on when the shelter-in-place will be lifted, access to contractors and supplies may be difficult or not possible until quarantines are lifted.

Consumers helps more than 1,000 members finance land, first and second homes, and home improvement projects each year—even during the corona outbreak. We’d love to help you with a mortgage or home equity line of credit; call us at 800-991-2221. We’re here to help you get the home of your dreams!

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Consumers home loans

Consumers helps more than 1,000 members finance land, first and second homes, and home improvement projects each year. We’d love to help you with a mortgage or home equity line of credit. Contact us!

Learn more

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  1. Tom Stack says:

    We are considering replacing the shingles on our home. Current shingles are approximately 20 years old. New shingles will run about $10,000. Would be interested in finance the $10,000 or less amount. We own the home and have no mortgage on it.

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