5 Mistakes People Make When Financing a Home Improvement Project

Thursday, February 9th, 2012 - Interior Design

Home improvement projects can increase the value of your home and make it more comfortable to live in. But before investigating current mortgage rates in Canada to help finance the remodeling project, be sure to familiarize yourself with these 5 common mistakes that people make when they are financing a home improvement project.

1. Underestimating the Costs – many people are unaware of the realistic cost of a home improvement project. In fact, they can often underestimate the project by thousands of dollars. Most home renovation projects exceed the original budget by 20%. To avoid this problem yourself, get multiple quotes from local contractors. If there are large discrepancies regarding the amount quoted, ask the contractors to explain the disparity. Make sure that everything is in writing and be sure that you have a clear understanding of factors that may increase the cost of the job, such as workers working overtime or in bad weather.

2. Not Planning Well – some individuals that are embarking on a home renovation project have not adequately prepared for the project. Some homeowners may inadvertently schedule a flooring person to be at the house at the same type that the cabinets are being installed. Others may forget important components that they need to consider for the remodel. Not planning well can keep you from securing the appropriate amount that you need for your remodeling project. Take detailed measurements, make drawings and a detailed list of materials you need to purchase and a schedule of when subcontractors will complete the work.

3. Not Planning for Unforeseeable Expenses

Home renovation projects have a thousand variables that all have the potential to ruin the best laid plans. Weather can prevent servicemen from completing the work. Some subcontractors may not show up. The warehouse may be out of the materials that you originally ordered or may have the order delayed. A subcontractor may open up a wall and find mold, asbestos or faulty wiring. Add 10% to the overall budget for such contingencies.

4. Making Last Minute Changes

Making changes to the material selections or adding work for the subcontractors can dramatically increase the cost of your budget. The old materials will have to be returned and these changes can interfere with the subcontractors’ schedules. This can delay the completion of the project. When you plan the project, make all of the necessary decisions at the beginning of the project. If you are uncertain whether you will like the various materials together, use a computer software program to generate a simulation of your remodeling project.

5. Failure to Obtain Permits

Many home renovation projects require the local municipality to issue a permit before work can be initiated. Not getting the required permits can result in hefty fines. You can also receive an order to stop work, resulting in losing your contractor and your project falling apart in the middle of the process. Get all of the permits that you need before you start the project.

By avoiding these home renovation mistakes , you can save money and achieve the results you were looking for!

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