Affordability

How do I know if I can afford to remodel?
Here are some questions we recommend you consider, in order to answer the affordability question.
1. Will you be applying for a loan to do the remodel? If so, since you will need a home appraisal, will the current property values in you neighborhood enable you to qualify for the best terms and rates? If this is a second or vacation home, how does that affect the financing options?

2. What are your future plans? Are you planning to sell this home in the near future? In our experience, homeowners make up the difference in the cost and the resale value in 5-7 years.

3. Do you have future maintenance issues that will have to be addressed? Would you be spending money now on the remodeling project, but saving money later? LD Watkins can offer options for repairing your house and making it low maintenance.

4. According to Remodeling Magazine’s “Cost vs. Value” survey, most remodeling projects recoup about 54%-86% of their cost in the first year. So, the longer you stay in your house, the more valuable the remodeling investment you make will become.

5. Do you have a reliable estimate of the cost? Many homeowners fail to obtain a realistic estimate of the TOTAL cost of their project until well after it is completed. Then, they must borrow much more than originally planned or use other funds. LD Watkins has many years of experience and can accurately estimate various remodeling project costs.

6. Do you know the difference between your mortgage amount and your home’s value? If you know what your house would sell for today and your mortgage amount, then you may be able to borrow the difference. Generally, banks will loan up to 90% of a home’s value less the current mortgage. LD Watkins can help you assess these numbers.

7. Remodeling affordability depends on the banker you talk to. We have seen credit worthy individuals turned down by one bank and granted a generous loan by another bank. When it comes to remodeling loans, there is a HUGE difference in banking expertise. We recommend finding a banker who specializes in remodeling loans. LD Watkins will be happy to recommend bankers.

8. Do you know what your credit score is? You may be able to borrow through an “unsecured” line of credit.

9. Will you receive tax credits from items in the remodeling, ex. new windows and doors? There are federal and state energy tax credits available for many products. Saving money on energy costs will help your future monthly budget. LD Watkins can refer you to tax credit information.

Call us today for a free consultation at 970-887-3044.
At LD Watkins, we will discuss these points with you, in order for you to make an informed decision about whether you can afford to remodel.