Home Value Improvements

You can enhance the value of a house with a few relatively inexpensive fixes. If a larger reno is required you may have to consider your financing options in more detail.

Experienced contractors can make the difference between a gratifying home improvement and a renovation disaster.

Make A House Worth More

Only well selected upgrades can help you to sell your house. If you increase its value beyond that of other homes in your area, you may price yourself out of the market.

Large projects don't always mean they will pay back more. Light renovations like painting or floor upgrades can yield good dividents. They are cost effective ways to increase value.

Kitchens and bathrooms typically do well, and an entire makeover might not be necessary. If you repaint walls, refurbish wooden surfaces, upgrade appliances, lighting and plumbing acccessories you're likely to sell faster and at a better price.

Other good (but more expensive) bets include basement adaptations, replacement of windows, and a new exterior siding.

Big ticket renos are justfied if your home can't sell without them. When a small living room or the lack of an extra bathroom discourage buyers, you may have to spend more money on a major upgrade.

Swimming pools do a little to increase worth, and sometimes they may lower a resale value. Many people think they're dangerous and expensive to maintain. In particular, families with young children may only look for a property which doesn't have a pool.

If you consider a pool in your property, you should have realistic expectations about the return. Your pool will cost a notable amount of money which may not be recovered when you sell the property. Some buyers may request pool demolition as a condition for closing the purchase.

How To Hire a Contractor

A word-of-mouth is your best search option. If you don't have a referral, finding a renovator isn't difficult. Many renovators are present online, so you can see their portfolios and learn more about them.

You may want to visit the site of Better Business Bureau, where you can search for contractors working in your area and review their records. Other noteworthy web locations to have a look at are yelp.ca and The Canadian Home Builders’ Association.

References - Many consumers underestimate the importance of a reference. Don't hesitate to get in touch with other homeowners as contact information is released with a consent. If references can't be provided consider someone else.

Interviews - Select three contractors to meet and learn more about them. Most of the information you ask for should be later detailed further in your contract when you hire the best candidate:

  1. Business licence and business liability insurance
  2. Workers' compensation coverage, or disability insurance for a self-employed individual
  3. How long they have been in business, their experience doing jobs like yours
  4. Do they have their own staff or hire subcontractors
  5. References from at least three of the contractor's past customers
  6. Cost estimate of your project, and when it could be started and finished
  7. Types and quality of materials to be used for the project
  8. When and how your payments are to be made based on work completion milestones
  9. What warranty will be provided for the work

Municipal Permits - Contact the municipality to determine if the work you plan to do requires a permit. The homeowner is responsible for all mandatory permits and inspections. Even if your contractor didn't inform you about the necessity of a permit, you'll still be held accountable.

Your municipality or a utility company can order to undo any work which doesn't comply with zoning by-laws or building codes.

Construction Liens - Protect yourself from liens when your contractor doesn't pay to subcontractors or suppliers by having a holdback clause in your contract.

You can withhold a portion of the total job cost (10% to 15%) for a period of 30 to 45 days after the work is completed. The homeowner's liability is limited to the amount of the holdback.

Make a final holdback payment only after checking with a land registry office that no liens are registered against your property.

Cash Deals - Some renovators may offer you a discount in return for a cash deal. However, such bargains could be very expensive when something goes wrong. You may be liable for work related injures, or you'll have no coverage if let's say a $100 plumbing repair caused a $5000 water damage.

There's only one way to make your renovation project safe - have a written contract and request a proof of insurance from anyone who ever works on your property.

Renovation Financing

You may consider financing a major renovation with a secured financing. These lending products require more paper work. They take longer to arrange, as the collateral has to be verified. In return, you'll be able to borrow more money at lower interest rates.

Unsecured financing for smaller amounts allows faster approvals, but you'll need a better credit score and you'll have to pay a higher interest.

Homeowner Line Of Credit (HELOC) can be used for long-lasting projects made in stages. It provides up to 65% of the home value, but the sum of the oustanding mortgage balance and the HELOC amount must not exceed 80%.

Rates are deliciously low. For instance, if the prime rate is 3%, the borrowing cost will be around 3.5% to 4%. You can choose own repayment schedule, but have to pay at least the monthly interest.

HELOC term can be open-ended or limited. Pre-defined terms may last from 5 to more than 20 years, and your entire balance must be paid back at the end of it.

Mortgage Refinancing - It's the process of repaying an existing mortgage and replacing it with a new one. Some homeowners refinance their mortgages when interest rates drop, so they can lower monthly payments or pay off faster.

Others use refinancing to tap into equity built up in the property. They negotiate a new mortgage, higher than they had in order to turn equity into cash. Refinancing is accessible up to 80% of the property value.

If you refinance you may have to pay a penalty on your original mortgage . In some cases it's worthwhile to consider if a second mortgage isn't a better option.

Line Of Credit will usually provide up to $50,000 of an on-going financing without a collateral. At the prime rate of 3% you'll pay from 4% to 6.5% interest, contingent on your credit rating, income and debt. Minimum monthly payments are 3% of the balance plus interest.

Personal Loan - The cost of an unsecured personal loan is quite high, but typically lower than credit card rates.

Always shop around. Ensure there's no penalty for making extra payments. Try to negotiate a reduction of interest at least 0.5%, and arrange weekly payments to reduce your cost.

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