REMODELING YOUR HOME

If you're finding the purchase of a new home an overwhelming prospect, you're not alone. For many people, an affordable alternative to buying a new home is to stay put and remodel their present house by adding more space or renovating. Home remodeling is a multi-billion dollar industry in the United States.

Tips Before Starting

While remodeling can be less expensive than buying a new home, it still represents a considerable investment. As with most worthwhile projects, planning is essential.

Consider the following tips before starting your remodeling project.

Choosing a contractor

Deal with a qualified and reliable remodeling contractor. It's best to get at least three estimates. Check each contractor's references with local home building and/or remodeling associations and previous customers. Avoid contractors who can't furnish a list of satisfied customers.

Ask the right questions:

• Was the work done on budget?
• Was the work done on time?
• Was the contractor tidy and courteous? The workers?
• Can the contractor handle finish carpentry work?

Signing the contract

Do not sign a contract until you are absolutely confident you understand all the fine print. When possible, consult an attorney on contracts for major renovations. Default on a legal contract could result in a lien on your properly, and, even worse, possible loss of your home to satisfy the debt.

Arrange the financing carefully

Few families pay for remodeling in cash. Many financial institutions offer second mortgages and home equity loans secured by your house. The interest charges on second mortgages and home equity loans are an income tax deduction.

Structure your contract so that the contractor will be paid in stages: 30% prior to the project's start; 30% when the work is half done; and the remainder upon completion. Many states have statues that require contractors to warranty their work.