Being a new homeowner (About 14 months now), we already started planning for few possible renovation. The flooring, bathroom and kitchen renovation are listed. Although we don’t yet have a tentative time for all renovation targets, we started thinking about financing. We are prepaying our mortgage, and this is the first priority for us now. As you know apart from the mortgage, we are debt free. We would like to live debt free for rest of the life, so this push for the mortgage pre-payment.
All three renovation we planned for need large amount of money. This post is to help families with renovation needs who are thinking about financial aspects of the work.
Planning a renovation project requires appropriate funding. Unfortunately, the costs of a renovation vary significantly based on the specific room, the number of changes and the structure of the property. By recognizing the common costs associated with renovation projects, you have the tools to obtain an appropriate renovation loan.
Evaluating the Costs of the Room
Each room in a home has different features and concerns that arise during the renovation project. The exact details of budgeting for the renovation loan requires some consideration for space and the specific goals of the room.
Generally, the cost of the room will depend on factors like the number of pipes, complications from the structure and the exact goals of space. A kitchen remodeling project, for example, usually costs around $11,000 to $28,000 before completing the entire space. Some projects cost more due to the materials or potential complications that arise.
Evaluate the average cost of renovations for space before making any changes to the room. Expect to pay roughly $10,000 to $30,000 for most rooms in the house. Spaces like the kitchen or a master bedroom usually cost more than a small bathroom or working on a small project throughout the house.
Expect Some Complications
Complications arise during the renovation that require additional funds when you apply for a 203(k) renovation loan. Identify potential complications based on the room or the size of the project. If you plan to renovate the entire house, then expect complications from pipes, water systems or even the foundation of space.
Small renovations, like the bathroom or changing part of the kitchen without adjusting the current layout, limit the number of complications or problems.
Set aside some funds to pay for any problems that arise, particularly when working in spaces with water pipes, gas for the stove or related systems. You also need to evaluate the safety of the project before you start working on a renovation.
Most of the expenses associated with a home renovation project stem from the labor and the changes; however, other expenses adjust based on the material and the quality of the items. Adjustable expenses allow homeowners to ensure that their home renovation loan meets their needs and goals.
Generally, the materials play a key role in the cost of renovating a home. High-quality materials, like granite counter tops or marble floors, add significantly to the overall expense of your renovation project. On the other hand, using less expensive materials will help reduce the cost and ensure that the project stays firmly within your budget.
Using a combination of expensive and low-cost materials will help maintain a reasonable price for any renovation project. For example, using granite counters in the kitchen, but opting for laminate or bamboo floors instead of marble. Select materials carefully to ensure that it meets your standards for quality while still helping maintain your budget requirements.
Estimating Costs with Averages
Using the average cost of a home renovation helps with the budgeting process; however, you must keep in mind that several factors contribute to the final expense, including problems that arise during the renovation.
Although you can obtain home renovation loans, you must have an idea of the final cost of the project before you apply for funds. You want to make sure that your FHA renovation loan covers the cost of the project without causing any delays for further application processing.
Renovating your home allows you to make adjustments to your lifestyle. The key to a quality renovation is recognizing the factors that contribute to the costs and preparing for any problems that might arise during the project.
By preparing in advance, you have the funds available to cover the cost of home renovations. It allows you to focus on making decisions about your home and personal style throughout the renovation project.
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Great post! I think homeowners have a constant list of renovations, up grades, etc. that they want to work on in their homes. I know underestimating costs of these projects is pretty common too, so I’m glad you talked about different ways to prepare for the costs of these projects.
Actually what I wanted but forgot to mention was the fact that always have your final estimate as 10-15% more than your best guess estimate. Almost always people go over budget on these type of works.