How to Finance your Remodel or Addition

Homeowners often dream of a new kitchen, home addition or master bath remodel, but put it off because they think financing is beyond their reach. What they may not realize is there are a number of ways to finance a home renovation other than the traditional home equity loan. By choosing an affordable financing method, homeowners can improve their home – and the value of their home – for a reasonable monthly cost.

First steps to financing your construction project

Before meeting with a lender, determine the scope of the project and get an estimate on the cost – then add 10 percent for cost overruns. If you are doing the work yourself, make a comprehensive list of all materials and permit fees. Add 20 to 30 percent on top of that for unexpected problems and cost overruns. Remember to factor in the schedule and estimated time of completion. If the project will take a few months to complete, that could influence your financing decisions.

What are the financing options?

A home equity mortgage has long been a reliable means for homeowners to fund large improvement projects. By working with your bank or credit union, you can borrow money against the balance of your home’s equity, paying it off over 15 to 30 years in some cases. These loans are tax deductible and carry a fixed interest rate, but that rate is usually higher than a conventional mortgage.

A home equity line of credit is a flexible option for lengthy renovations and DIY projects. These loans work like credit cards, where a lender provides a loan and homeowners can borrow multiple times up to the total value of the loan, paying back what they borrowed typically over 8 to 10 years. Before signing on to a home equity line of credit, make sure to review the APR, closing costs and other loan details carefully, as some lenders market low-cost lines of credit only to increase interest rates or add fees to the overall cost later.

FHA 203(k) mortgages are federally-insured loans that allow homeowners to simultaneously refinance their first mortgage while combine it with the improvement costs into a new mortgage. These loans base the amount a homeowner is able to borrow on the value of the home after improvements, allowing homeowners to borrow more than they would be able to with a traditional home equity loan. However, these loan limits tend to be low and can vary depending on where you live.

Borrowing from a 401(k) is another option, especially for homeowners with a few years of work savings under their belts. Both the money borrowed from a 401(k) and the interest are repaid to you, instead of a bank. Some financial experts aren’t keen on this because it removes money from a retirement savings account, instead of letting it grow. These loans are typically repaid in 5 years, but if a homeowner changes jobs or loses a job, the loan may need to be repaid in 90 days or the owner could face early withdrawal penalties.

A diverse approach to financing a project

For some homeowners, the money to pay for a renovation might come partially from savings, partially from a line of credit and partially from another source. Funding a home repair with a variety of sources can reduce your overall debt.

If you have questions about the cost of a home renovation or addition, Dube Plus Construction can answer your questions. Give us a call today.

Choosing Energy Efficient Windows for New Construction

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Homeowners want windows that are attractive, easy to clean, and above all, energy efficient. Windows are an expensive part of new home construction, so choosing the right one can sometimes be a stressful chore. It doesn’t have to be, if you have a few terms under your belt and know what each material delivers in quality and efficiency.

Window basics

The first thing you need to consider is what style of window you’re looking for. Double hung windows are by far the most common style, especially in New England’s older homes. With this style, both the upper and lower parts of the window open up or down for optimal ventilation. Single-hung windows are also available for a lower cost, but are limited in that only the lower half moves. The upper half is sealed to keep out the weather.

Casement windows are typically found in kitchens, bathrooms and more modern homes. These windows swing outward on a side hinge with a crank. They provide good ventilation, high efficiency and are easy to clean. Awning windows, similar to casement windows, swing outward on a hinge on the top. The benefit of awning windows is that they can remain open in rain and are also air tight.

Fixed windows are those that do not open, such as a picture or bay window. These too are come in a range of materials and energy efficiency ratings.

Energy efficiency terms decoded

When you start your shopping for windows, you’ll see lots of terms that are meant to help you select the best option, but can be confusing.

U-factor – How well the window can keep heat in your home. Also known as the U-value, it ranges from 0.2 to 1.2. The lower the number, the better.

Solar heat gain coefficient (SHGC) – How well the window can block unwanted heat from the sun. Usually rated between 0 and 1, having a lower the number is better for homes in warm climates; a higher number is fine in cold areas.

Visible transmittance (VT) – How much visible light a window lets into the home. Rated between 0 and 1, the higher number means more light is let in.

Low-E coating – A transparent coating added to the windows to keep heat in or out. In warmer climates, it’s added to the outside and in colder climates, it’s added to the inside. Although it is transparent, any coating added to a window decreases visibility.

Double or triple glazing – These windows have a sealed space between two or three panes of glass that is filled with air or gas. The gas provides insulation, reducing noise significantly and heat loss. Double glazing is more common, but triple glazing provides more protection. The added cost of triple glazing is not usually justified except in areas that are extremely cold or are regularly subject to loud noise, like near an airport or interstate highway.

Materials matter

Wood is a popular choice for window frames because they are the most energy efficient. They also require the most upkeep. Homeowners will need to paint or stain the windows every few years, and in wet climates could be susceptible to rot. But in general, most wood windows last for many years.

Vinyl frames get a bad rap for their looks, but when it comes to value, a quality vinyl window is a good deal. It requires less upkeep than wood and a well-constructed vinyl window can provide great energy efficiency.

Aluminum frames are less energy efficient, since heat and cold transfer more easily through metal than wood or vinyl. They are a good choice in places that may sustain high winds, such as a beach-front home or in areas susceptible to hurricanes.

Wood-clad frames offer multiple benefits. With vinyl on the outside, they are low maintenance and with wood on the inside, they are energy efficient. For homes in wet climates, wood-clad isn’t the best choice. Water and moisture can get in between the vinyl and wood, causing the inside to rot. They are also tricky to install, increasing the likelihood of water damage to your home.