OK guys sit back and brace yourselves this one is not going to be funny. After I posted my blog on last Friday regarding my take on todays eonomy I began to see other opinions especially regarding it\’s effect on the modern day homeowner’s plan\’s or lack thereof on home renovations. In a blog posted 2/1/09 on “Walletpop” entitled “Home slump hits home decor trends”, Zac Bisonette cites “fancy kitchens and fireplaces that were so important to buyers during the housing boom are going out of style”. He goes on to say “It\’s hard to know what to make of these trends. Are they long-term changes in taste or is luxury just taking a leave of absence while people cope with plummeting job security….Even if luxury items like granite countertops and fireplaces are desirable, they may not be desirable enough to justify the additional expense.”
In the high flying days of the past ten years homeowners had available easy credit in the form of home equity loans, readily available credit cards and revolving credit terms from retailers. In 2008 with the U.S. banking and real estate crisis in full free fall these facilities have all but vanished. Banks have stopped lending, home mortgage loans are virtually a thing of the past and credit card companies have raised their interest rates and lower the credit available even to their best customers. Its easy to see why American’s taste for luxury items has diminished. The fact still remains, as I pointed out in my blog of 2/13/09, that this does not eliminate the need for refreshing of that tired old kitchen or bathroom to make your house more saleable if that is your fate or to make you home feel better to your family in these tough times. What it does mandate is a more frugal approach. Frugal does not mean “cheap” but instead indicates a more careful reasoned approach to how something is expended. Can you afford to replace your old laminated countertops with granite? Can you reasonably replace that linoleum in the kitchen with real hardwood floors? Can you afford custom made cabinets? new stainless steel appliances? Glass tile backsplashes? And the list goes on and on. In general the frugal answer is NO! This does not mean that you can’t make reasonable, attractive and useful changes to your kitchen or bathroom. You just have to be smarter in your choices as well as shopping smarter.
Here are some recommendations. Instead of granite you can choose from a wide assortment of man made surfaces, such as Corian, which in most cases can be half the cost of Granite and a whole lot easier to maintain. You can choose from dozens of forms of laminated flooring, such as \”Pergo” instead of hardwood floors again saving 50% or more. When recently finishing a family room/kitchen project in our basement I was able to find a weekend sale on laminated flooring at a major retailer for $.99 a square foot. That’s less than the $9.00 per sq.yard and less than the least expensive carpet plus my son was able to install it. We could not have installed carpet and that would have added another $3 to $4 per sq.yd or more to the price and we had the look of hardwood at a fraction of the price. As for custom made cabinets the best buy in cabinets and vanities today is in prefab cabinets which come broken down flat in cartons and you assemble them yourself. The most familiar of these come from vendors such as “Ikea” or like “Kraftmaid” available at the large home improvement stores. Not only are these cabinets a great buy but are high in quality and features. Can’t afford stainless steel appliances? Look at “Craigslist” any day and you will find great deals in practically new appliances at a drastic cut in price. The bottom line is shop smart and make educated choices. Take these ideas and team them with the suggestions I made in my previous blog such as upgraded faucets, sinks, new paint and other fixtures and you can have a great looking functional new look and space in your home at a reasonable attainable price. To reiterate my point, it is far more important than just vanity that we consider making these improvements. The economy is consumer driven. If we expect things to turn around quickly we all must regain our confidence that the American economy is resilient and has been a shining example to the world for 200+ years. To this end we need to invest in reasonable improvements. We need to spend carefully but we need to spend. Money sitting in a savings account drawing zero interest is not helping the economy. The banks aren’t lending the money, they are sitting on it. Investing in home improvements creates demand, creates jobs and works to restore the public confidence in our economic system.

You’ve decided to spruce up the homestead with some needed improvements. Fantastic. Now here lies the rub, how are you going to find home improvement financing?

Let’s face it, kitchen floors and new window panes don’t grow on trees. Even though home improvements are an investment that will make you money in the long run, finding the home improvement financing you need now can be difficult, and not getting an adequate amount of funding for your projects can lead to compromises in quality that you may later regret.

Homeowners have a variety of options when it comes to finding home improvement financing. They can borrow against the equity in their homes and various federal loan programs also exist for borrowers. Here’s a few home improvement financing options you may what to consider:

Mortgage refinancing: Now is the time to take advantage of historically low interest rates by refinancing your mortgage to pay for home improvements. You can refinance your mortgage and borrow money against the equity you have in your home. Some banks even offer loans that allow you to borrow more money up front by adding the value of the planned improvement to your equity. Refinancing your mortgage for home improvement financing purposes is a good deal because you’ll have the convenience of just one home loan and monthly payment.

Home equity loans: These loans, also known as second mortgages, lets homeowners borrow money by leveraging the equity in their homes. They’re popular among folks looking for home improvement financing because homeowners are able to deduct the interest from their federal taxes.

Federal Title I loans: If you don’t have much equity in your home, you may qualify for home improvement financing under a Title I loan. These federally-backed loans offer negotiable interest rates and can be tapped for about $25,000. The loans can only be used to pay for essentials however, such as improvements made necessary by a medical condition, not luxuries like swimming pools.

One method of home improvement financing you want to avoid is financing through a contractor. These loans often are made by sub-prime lenders and come with hidden fees. Also, getting financing through your contractor puts you in a poor bargaining position with him when it comes to getting a quote for your home improvement project. When hiring a contractor, it’s best to have your budget and home improvement financing already prepared to ensure the best deal.

Home ownership is like any other investment — you’ve got to spend money to make money. But to get the most out of your home investment, make sure you get your home improvement financing right. Borrow from reputable lenders and don’t overextend yourself.