By TRACY CORRIVEAU and KIM POOLE
You’re ready for a remodel when …
1.You have 20 percent or more equity in your house. To calculate subtract the amount you own from the value of your home, then divide that by the amount you owe.
2.You have at least three months of living expenses saved for dual income, single you should have six months.
3.Your combined monthly debt is no greater than 41 percent of your monthly income.
4.You have a solid credit score, preferably 720 or higher.
The good news is building materials are down as much as 15 percent and good deals are available on appliances at large retailers like Lowe’s and Home Depot.
In some cases renovating a kitchen today costs 20 percent less that it did before the economy weakened. Also, many contractors have lowered their prices by 10-20 percent.
With the slowdown in building you’ll find that contractors are offering a much broader line of services and are readily available. Now they are able to finish a job once they start it without a three-week interruption with a job at another site.
Homeowners are in the driver’s seat now. They can get the company they want on their schedule.
Tapping home equity responsibly is not out of reach for most of us. Interest rates are at an historic low with some below 5 percent. Again you’ll need that great credit score, steady job and 20 percent or more equity in your home. Many local banks did not get caught up in the financial meltdown and are still lending.
When choosing your project you need to be selective and keep in mind the value of your home and the surrounding homes in your neighborhood. Planning a $1 million kitchen for a $200,000 house will not pay off. Don’t forget about general maintenance, buyers are still looking for move in ready homes. A well-maintained home will sell faster and for a better price than one that needs work.
The opportunity is now to take advantage of the low interest rates, availability of some great contractors with flexible schedules. Renovate now and enjoy it for years to come.
Windermere Real Estate agents Tracy Corriveau and Kim Poole can be reached at (360) 297-2661.
