Your home is more than just a house. It’s where you create memories with your family, entertain friends, and relax after a hard day at work. As time passes, you want your home to keep up with your changing life and style. Home improvements are a great way to add value to your home and get the most joy out of it.

Perhaps you want to finish your basement to provide more privacy for your teens. A kitchen or back patio upgrade could be great for entertaining guests. Or, maybe you work from home and want to keep your “work” and “home” separate with a designated office.

Doing home improvements is an excellent way to extend the life of your house and increase its value. However, before you jump in, review the following tips to help you prepare for your home makeover.

Prioritize Your Upgrades

Some people have very long to-do lists when it comes to remodeling their homes. While it’s ambitious, oftentimes, our eyes are bigger than our wallets. If you have several major renovations you want to complete, start by prioritizing them.

For example, while you might want to remodel your kitchen, put in a new deck, upgrade your floors, and paint your house. However, it’s smart to start with the most important one. This step mentally prepares you in case you need to postpone some projects until more funds are available.

How do you know which one is most important? Ask yourself these questions:

  • Is it an upgrade or a functional repair? If your deck is falling down or you have rotten wood, but your kitchen just needs some new appliances, start with the deck. That’s a functional issue and a hazard.
  • What do you use the most? If a basement remodel gives your kids the space they need and they will use it constantly, perhaps do that over something that can wait.
  • Is it a need or want? This ties into the first point of it being an upgrade or a repair. For example, if your fence is broken beyond repair, you need to fix it. If your bathroom technically works just fine but it needs to be updated, that’s a want.

Define Your Project

Once you prioritize your projects, begin to define the scope of your remodel. If you plan to redo your kitchen, start by sketching out all the changes you want to make. Make it your ultimate wish list. Then, narrow down the range of your project.

  • What will need to be replaced?
  • Can anything be reused or repurposed, such as appliances, countertops, or cabinets?
  • Does the room need to be gutted, or are the floors still in good shape?
  • Do you need to remove walls, rewire the electricity, or redo the plumbing?
  • Will you need to obtain specific building permits?

The more details you can provide a contractor, the easier it is for them to give an accurate estimate.

Obtain Quotes for Your Remodel

When you have a pretty good idea of the scope of your project, start getting quotes from licensed contractors. This step will help you determine your budget and whether you need to make adjustments to bring the price down.

  • Get estimates from several contractors. Not only does this provide better figures for budgeting, but it can also open your eyes to new possibilities. For example, one contractor might have ideas on how you could do the project more affordably. Another might know how different materials could provide a desired look without the need to tear down a wall.
  • Ask neighbors and friends for referrals. Word of mouth is the best advertising, especially when it comes to large projects. Get referrals from people who have used the company before and were satisfied with the work. Post on neighborhood forums like Facebook groups or the Nextdoor app asking for recommendations.
  • Always request an estimate on the project timeline. One company might be able to do it cheaper, but it could take twice as long. Always weigh your options. Look at everything, including the price, quality, and time.

Estimate the Potential Return

Anytime you make significant changes to your home, you want to determine whether the project will add value to your property. It’s nice to be able to recoup your costs once you sell your house.

Not all upgrades add value, and some provide much more than others. Before you begin a major remodel, contact a local real estate agent (or two). In exchange for a nominal fee, they will typically help you estimate how much value the remodel will add to your home.

This step is especially important if you’re using a home equity loan. Being able to use your existing equity to build even more value (or equity) is a win-win.

Lock in Your Financing

Before you begin looking at financing options, it’s wise to revisit your budget and project estimates. As with any construction project, you want to measure twice and cut once. It’s the same with financing. You don’t want to get a loan only to discover you underestimated the cost of your home improvements.

Always add about 10% to your estimated project cost as a safety measure. If you come in under budget, apply the extra funds back to your loan to pay it off quicker.

Once you have your final figures, you can begin looking at ways to pay for your project. The best financing option will largely depend on the size and scope of your project.

1. Options for Smaller Home Improvements

A home improvement loan might be the ideal solution if your remodel cost is on the lower end. It has flexible terms and the approval process for this loan is relatively quick, usually within 1 business day.

While credit cards are convenient, a home improvement loan offers a few signature benefits:

    • Lower Interest Rates: Home improvement loans typically have lower interest rates than credit cards. That means you can put more money toward your project instead of making additional interest payments.
    • Easier to Budget: With a home improvement loan, you receive a specific amount of money. This feature helps you stay within your budget and better organize and track expenses.
    • Set Repayment Plan: Credit cards only require a minimum monthly payment. This amount is usually nominal and can cause you to drag out project costs for months or years. A home improvement loan has set monthly payments that help you repay it quicker and avoid long-term debt.

2. Options for Larger Home Improvements

If your remodel costs a significant amount, two ideal solutions are a home equity loan or a cash-out mortgage refinance.

    • Home Equity Loan or HELOC: A home equity loan lets you tap into the equity in your property. It’s a popular choice for home remodels because it allows you to use your existing home equity to build even more equity in your house. As a secured loan, the interest rates are much lower than personal loans or credit cards, and the terms can extend up to 10 years or more. Between the lower interest rates and longer repayment terms, a home equity loan helps you keep your monthly payments lower.
    • Cash-Out Mortgage Refinance: Another option is to refinance your first mortgage and withdraw a portion of the equity at the time of closing. This option costs more upfront as you’ll encounter more extensive closing costs. However, if mortgage rates are declining, you could benefit by locking in a new, lower rate on your first mortgage. Plus, the funds withdrawn during a cash-out refinance are tied to your mortgage – providing loan terms up to 30 years. This will significantly reduce the cost of your project in terms of monthly payments.


We’re Here to Help!

Your home is your castle, and you want to care for your property as well as it cares for you. Whether you need to make repairs or want to upgrade your living space, we’re ready to help.

Our lending experts are on hand to answer all your questions. If you want to learn more about financing your home improvements, call, text, or chat with one of our representatives. We’re here M-F, 9am-4pm ET. (315) 671-4000.

Each individual’s financial situation is unique and readers are encouraged to contact the Credit Union when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.