10 Ways to Save on Utility Bills This Summer


Now that the weather is beginning to warm up, it’s time to start thinking about ways to save on utility bills and energy costs before you’re shocked by your first big bill this summer. Luckily, there are many steps you can take to prepare your home (and your wallet) for the summer heat without sacrificing comfort. So, before you crank up the AC, take a look at our top ways to save on utility bills this summer. Your budget will thank you!

1. Get Your HVAC System Ready

Is there anything worse than a broken HVAC system in the summer? The good news is you can avoid this nightmare by taking precautions and getting your HVAC ready for summer. First, you’ll want to clean or change the air filters as dirty or clogged filters force your air conditioning system to work much harder, which in turn causes more wear and tear in the long-run. You’ll also want to inspect your outdoor unit for any visible signs of damage such as warped panels, torn insulation or rust. In the colder months, small animals may nest inside the insulation so you’ll want to inspect the inside as well. Taking these steps to ensure your AC unit is working efficiently will help keep your energy bills low this summer.

2. Clean Air Filters and Vents

Many homeowners make the mistake of closing off vents in rooms that are not being used, but closing vents causes more pressure in the ducts causing your air conditioner to work much harder. Before you turn the AC on this summer, open all the vents and give them a nice cleaning.

3. Keep Blinds Closed

Did you know that keeping your blinds closed during the day can drastically reduce the heat in your home? Keeping them open causes a greenhouse like effect—sunlight and heat pour in all day and can’t get out, making your home much warmer and causing your air conditioning to work over-time, which in turn will spike up your power bill.

4. Lower Your Utility Rates

Do you live in a deregulated energy region? If so, you have the power to choose your energy provider and can shop around for the lowest energy rates. If you haven’t researched your options in a while, summer is the perfect time to reevaluate your current energy provider and find out if there is a cheaper rate out there. Many deregulated energy providers offer special promotions in the summer, like “free nights,” so you should definitely check out what else is out there.

5. Time Your Thermostat

If you want to be cost conscious this summer, you shouldn’t blast your air conditioning at all hours of the day. A lower temperature setting at night and a higher setting during the day is recommended for optimal cost savings. If you’re forgetful or aren’t always around to change it, we recommend installing a programmable thermostat that allows you to schedule your temperature changes even when you aren’t home.

6. Switch to LED Bulbs

While incandescent light bulbs are cheap, they use more energy and produce quite a bit of heat compared to LED bulbs. LED bulbs tend to be a little more expensive than incandescent lights, but they last longer, produce less heat and create great energy savings in the long run. So, consider making the switch the LED lights, at least in the rooms you use most, to help lower your utility bills this summer.

7. Buy a Water Cistern

If you don’t know, a water cistern is a device that captures rain water and stores it for you to use to water your garden or lawn, to wash your car, etc. Your water bill can get out of hand in the summer as you spend more time outdoors, so a water cistern is a great investment if you want to keep your garden and lawn green all summer long without paying for extra water use.

8. Use Your Ceiling Fan

In the warmer months, you should run your ceiling fans counter-clockwise. Since heat rises, the counter-clockwise motion will help pull the cold air up toward the ceiling. Running your ceiling fan efficiently will help cool your rooms, allowing you to set your thermostat to a higher temperature, ultimately reducing your power bill.

9. Invest in Smart Power Strips

Connecting multiple appliances to a smart power strip that can be turned off with only one flip of a switch at night when the devices aren’t being used is a quick and easy way to help reduce energy waste. When you don’t have to unplug all your devices individually, saving energy suddenly becomes much easier!

10. Don’t Use an Irrigation Schedule

Irrigation schedules or timers that you can set to schedule when your garden or lawn will be watered sound nice in theory, but they actually produce quite a bit of water waste. You can’t control when it rains, and you may not be home to stop your irrigation system from going off when it does. Watering manually may seem like a chore, but when you think about all the money you can save from reducing water waste, manual watering becomes more appealing.

Don’t let the first utility bills of summer sneak up on you. Be proactive and implement our tips, we promise they’ll help you save big on your utility bills this summer!

Why is renting perceived as the more affordable option?

A home is the first appreciating asset most Americans will own and the first step many will take toward building wealth.  With rents skyrocketing around the country, the average monthly mortgage payment is typically less than the average monthly rental payment in most regions.  According to a new Freddie Mac report, 67% of renters continue renting because they believe it is more affordable than buying a home.


Executive Vice President and Head of Freddie Mac Multifamily, David Brickman, explained, “Perceptions of affordability and cost continue to play an outsized role in the choices of America’s renters, as they overwhelmingly see renting as more affordable and the right choice for them right now.”

Based on Freddie Mac’s survey, 74% of millennial renters plan to continue renting because of financial reasons.  One of the most significant financial obstacles renters face is saving for a down payment. Zillow estimates that to save a 20% down payment, the average household would have to save 10% of their household income annually and based on that rate, “single earners would take more than 12 years, while partners with one income would take six to 8.5 years, and partners with two incomes would take 3.6 to 4.9 years.”

However, the 20% down payment is a conservative estimate.  Many loan programs offer low down payment or flexible down payment options.  Down payment assistance and grant options are also available in many areas, especially for first-time home buyers.  Down payment crowdfunding with CMG Financial’s HomeFundMe™ is another way for perspective home buyers to grow their down payment.

A growing number of renters are also dismissing homeownership altogether.  From Brickman, “Remarkably, half of Baby Boomers who rent do not anticipate owning a home in the future, with a growing number of Generation Xers following suit. Indeed, we are witnessing a historic shift in preference among older Americans, as they increasingly are choosing the size, convenience and affordability that renting offers over ownership.”

One fact remains true, as home values continue to appreciate. Homeowners are continuing to build equity while renters are not.  Before making the switch from renting to buying, it is best to consult a mortgage professional and weigh your financial options.


Sources: Freddie MacNational Mortgage MagazineZillow

4 Hot Trends for Outdoor Spaces

Regardless of its size, a home’s outdoor space should be a showpiece in a listing.

“This year it’s really about making your outdoor space function like an interior space for all things fun, lounging, and entertaining,” Gretchen Kennelly, a San Diego interior designer, told realtor.com®.

Designers offered up some of their trend insights to realtor.com® for homeowners or sellers trying to maximize a home’s outdoor potential, including:

Alternative flooring options

Outdoor rugs have been common in recent years, but more flooring options are emerging, such as porcelain. Porcelain is known as being durable and simple to install, which is adding to its popularity. “Porcelain pavers can create this beautiful transition without creating a huge divide between the two living spaces,” says Joe Raboine, national design and training specialist with Belgard. Ikea’s beechwood deck tiles are another way to enhance a patio or balcony’s flooring without spending a fortune, says designer Christina Harmon.

Vertical gardens

A garden can fit in any space outside; just go up instead of out. Vertical gardens maximize the available space by growing herbs and veggies upwards. Arbors, arches, pergolas, and gazebos can help enhance a vertical garden. “They’ll create the ambience of an outdoor garden ‘room’ and give a sense of height and depth to an otherwise small space,” Raboine says. Read more: The Hot Home Trend of Vertical Gardens

Attention-getting lighting

“This year is the time to brighten up the exterior of your home in unexpected ways,” Michael Amato, creative director at the Urban Electric Co., told realtor.com®. “If you have an all-white painted brick or stucco home, adding lighting in a fun color like blue with gold hardware creates interest. If your house is already painted a fun color, lighting presents a great opportunity to work in a contrasting color for a striking statement.” Hanging stringed Edison-styled bulbs along an outdoor space can create a festive flair to a backyard too.

Blues and greens

Deep blues and greens are on trend this season in outdoor spaces. Fabric cushions and umbrellas are showcasing the color. “This year, it’s all about outdoor spaces that feel luxurious rather than cheesy,” Harmon says. “Think lots of neutrals coupled with gorgeous jewel-toned greens and furniture and accessories that create a truly indoor-outdoor vibe.”

Source: “Outside Is the New Inside, and 7 More of the Year’s Biggest Outdoor Design Trends,” realtor.com® (May 9, 2018)

Fed Decides to Leave Rates Alone—For Now

The Federal Reserve decided Wednesday that it would not raise rates and keep its benchmark interest rate unchanged, despite rising inflation. Mortgage rates are not directly tied to the Fed’s benchmark rate, but they do tend to be influenced by them.

The Federal Open Markets Committee had raised rates for the first time in 2018 at its last meeting in March. At that time, it had increased the federal funds rate by 25 basis points.

At May’s meeting, the FOMC voted to keep rates the same and maintain the target range at 1.5 percent to 1.75 percent.

“Information received since the Federal Open Market Committee met in March indicates that the labor market has continued to strengthen and that economic activity has been rising at a moderate rate,” the committee noted in a statement. “Job gains have been strong, on average, in recent months, and the unemployment rate has stayed low.” Inflation has risen to nearly 2 percent.

The FOMC also said that it expects to continue gradually raising interest rates later on, but that they will likely remain at historically low levels “for some time.”

“The committee expects that economic conditions will evolve in a manner that will warrant further gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run,” the committee stated. “However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data”

Source: “FOMC Keeps Rate Hike Off the Table at May Meeting,” HousingWire (May 2, 2018)

Must-Do May Checklist for Homeowners

May marks a golden opportunity for homeowners to assess their home and ensure everything is in tip-top shape before the summer months begin. HouseLogic recently provided a checklist that your clients can use to save both time and money.

For smart homeowners, these four tasks are essential for the month of May:

  1. A new refrigerator. If your current fridge is leaky, not cooling enough, or tight on storage space, consider buying a new model this month. May is pre-summertime—which is when new fridges will hit the sales floor—and stores will need to clear out old models to make room. If your home needs a stove or other kitchen appliances, HouseLogic advises to wait until fall when they’ll be going on sale.
  2. Exterior painting. Buff up your home’s outer coat of paint to revive its color after winter’s drab weather. In most areas, May temperatures range from 50 to 80 degrees Fahrenheit, which is prime weather for painting your home’s exterior. HouseLogic also suggests making touch-ups to your home’s trim and siding while you’re repainting.
  3. A new mattress. How old is your current mattress? Over time, mattresses collect more dust and mites so be sure to upgrade yours if it’s needed. Stores will offer a good mattress deal in May before new stock comes in, helping you save hundreds of dollars.
  4. Overflowing closets. Be on the lookout for deals on storage materials at Memorial Day sales, and start tidying up those closets! According to HouseLogic, experts estimate that only 20 percent of what’s in peoples’ closets are actually worn. This month, trim down and store the 80 percent of your wardrobe that’s left: put sentimental clothes (college sweatshirts, t-shirt memorabilia) and those pieces you need but rarely use (formal wear) in storage containers and under-the-bed bins.

Low-Cost Kitchen Storage: Cheap Stress Reduction Low-cost storage strategies bring calm to your kitchen, banishing stress-inducing clutter and leaving the space orderly.

Good news for budget-minded cleaning compulsives: Getting organized in the kitchen won’t drain your piggy bank.

Stash more cash and control the chaos with these low-cost kitchen storage solutions, all readily available at home centers, discount stores, and online.

Rack Attack

Store pots, everyday dishes, spices, and wine on racks that are freestanding, wall-hung, and ceiling-hung—and voila! Everything is in its own location, visible, and easily accessible!

Position the racks where they make sense: A pot rack above the cooktop; a dish rack close to the dishwasher for quick unloading; spices near the range or meal prep area; a wine rack near the wine glasses and dining table.

You’ll find racks in metal, wood, and other materials, starting as low as $10 to $15.

Shelf Expression

You can size an open shelf to fit anywhere you need it and paint or stain it to match your décor. Use shelves for storing such kitchen necessities as cookbooks, attractive dishware, oils and vinegars, and spices.

Home improvement centers have storage sections where you can hunt, but don’t overlook the office supply and bathroom sections for even more low-cost shelves.

You’ll find cool shelves starting as low as $8.

Great Divide

Organize the contents of kitchen drawers and cabinets with wire or wood inserts. Drawer dividers keep utensils sorted and orderly. Vertical dividers inside cabinets create a spot for storing trays and cookie sheets. You’ll also find special inserts for storing knives and spices neatly inside drawers.

Available in wire, wood, or plastic, dividers start at about $3.

Elevated Thinking

Wire stacking shelves have legs to elevate the storage surface. Set a stacking shelf on a countertop, existing shelf, or inside a cabinet to increase kitchen storage space. Use a stacking shelf for canned goods, dishware, spices, and more.

Prices start at about $6.

Hang Ups

Install pegs or hooks along a backsplash, inside cabinets, or anywhere on a kitchen wall to create a place for cups, hot pads, cooking utensils, keys, and recipe clips. Hooks are available that fit over doors or come equipped with magnets that adhere to any metal surface.

Pegs and hooks start as low as $1.

Basket Case

Baskets come in a variety of materials to complement your décor, from natural woven grasses to canvas to colorful plastic bins. Set baskets on open shelves, inside cupboards, and on the kitchen counter to round up small items, such as napkin rings and bamboo skewers.

Baskets are great for storing dish towels, cloth napkins, and coupons. Prices start as low as $1.

Remodeling Regret: 5 Kitchen Layout Ideas to Avoid Make sure “It seemed like a good idea at the time,” doesn’t cross your lips after your remodel.

It’s the day you’ve been dreaming of: It’s time to plan your kitchen remodel. Dream big, but make sure you’re not making mistakes that’ll cause you to regret the money you spent and the inconvenience you went through.

What kitchen renovation decisions might you regret? Here are five.

1. Creating a Crowded Kitchen

crowded kitchen

Your kitchen wish list might be long, but make sure you’re not trying to squeeze too much into the space you have. Installing an island? Make sure it’s surrounded by at least three feet of space on all sides. And make sure you can walk around your dishwasher, even when it’s fully open.

If you’re not sure what will push your kitchen over the line from “full” to “stuffed,” the National Kitchen and Bath Association offers detailed measurement guidelines for every imaginable situation, like ensuring 15 inches of landing area around your microwave and refrigerator. The fridge also requires four feet of floor space for the door.

2. Going Overboard with Open Shelving

Yes, it’s popular. And it can look amazing, especially to show off a stunning collection of cookware, and to make your kitchen look unique. But give some serious thought to which shelves should be open. Open shelves for items you use often, such as plates and coffee cups, are a good idea because you use them often so they’ll stay clean. But if you use open shelves to store things you use infrequently, they’ll quickly become dust collectors. You’ll also want to avoid making your lowest cabinets open. They’re harder to clean and tend to fill with dust faster.

Still debating? Edie, the blogger behind “Life In Grace,” found the open shelves on her kitchen island impractical and dusty, but loved their look when installed above the countertops. “All the dust floating in the air will land on the lower open shelves and threaten to drive you to the brink of insanity,” she writes.

3. Getting Overly Luxurious


Major kitchen remodels recoup less than 70% of their value upon sale. (A minor kitchen remodel will receive slightly better returns.) Unless you’re planning on staying in your home for a very long time, and having an über-high-end stove is really important to you, don’t waste your time and money on a splurge. Top-of-the-line appliances and other luxury upgrades just lighten your pocketbook — without adding much value.

4. Forgetting About the Garbage


When “Apartment Therapy” asked its readers for their biggest kitchen design mistakes, there was one unexpectedly common response: forgetting about the trash. There’s little worse — at least in terms of a kitchen remodel — than a gorgeous workspace with no place to discard your garbage.

Don’t forget to make room for either a can or compactor in your new kitchen. After all, now’s the time you can design a specific space to hide that ugly plastic box. Whether you stick it under a sink (maybe install a sliding system?) or even custom-cut a hole in your countertop for easy disposal, keep trash in mind when designing a beautiful room.

5. Neglecting to Properly Vent

properly vent

Cooking dinner for a family of four can release more than a pint of water into the air — and if you’re using a gas range that number doubles (and adds carbon monoxide). Improperly vented, that liquid seeps into your walls, ceiling, and appliances where it can cause problems with mold and mildew. Make sure your ventilation systems are properly installed and lead outdoors, which keeps your kitchen cleaner and helps protect your home’s structural integrity.

The opportunity to reshape your kitchen into the workspace you’ve always dreamt of can be so tempting: Finally, a bigger island with enough room for all your groceries. At last, an upgraded refrigerator. But in your haste to redecorate, don’t forget to think things through — otherwise your fantasy kitchen could turn into your biggest regret.

8 Ways New Homeowners Accidentally Trash Their Yards Avoid these rookie mistakes to keep everything beautiful.

You’ve done it. You own a house with a yard. The great outdoors. Amber waves of grain. OK, maybe not grain, and ideally you want it green, not amber.

But now that you have it, how do you keep from screwing it up? By avoiding a few common gaffes that landscaping experts say new homeowners make waaay too often.

“They end up buying the wrong fertilizer, they have no clue what weed killer is, they kill their entire lawn, they kill their bushes — and then they call me,” says Dean Granat, who runs D&D Landscape & Sprinkler Services Inc. in Buffalo Grove, Ill.

Here’s what the pros say newbie homeowners often do wrong with their lawns and yards:

#1 Not Following Product Instructions

Peter and Leah Lenz, two bright, educated people (data scientist and attorney) were thrilled when they bought their Westchester County, N.Y., home — only to have their lawn undone by a little bugger known as the Japanese beetle.

“When we looked at the house originally, we weren’t even looking at the yard because it was March, and it was covered with snow,” says Peter. “But when we moved in, we noticed the previous owners had patched holes where the beetles had already hit.”

Once Peter identified the problem, he launched “full-out chemical warfare.”

Sadly, he did not read — nor heed — the instructions for his “weapons,” and the beetles won the first round.

“There are different granulated chemicals you can put down in the spring and the fall, and I discovered there are different formulations for the different seasons,” Peter says. “One of the mistakes I made the first year was using the spring formulation in the fall, and it didn’t do a damn thing.”

Today the lawn is lush and green thanks to the proper use of anti-beetle products the second time around. “I smile when I see the backyard,” Peter says.

#2 Misusing Fertilizer

The No. 1 problem new homeowners have with fertilizer, says Eric Groft of the landscaping firm Oehme van Sweden, is overdoing it.

“Instead of putting in the correct amount of fertilizer, they put in more — and more is not more.”

Too much fertilizer adversely affects plant growth, can burn and even kill grass and plants. And, if it runs off into waterways, can cause toxic algae bloom.

To avoid those awful outcomes, prep and apply fertilizer with care. Use only the amount of recommended fertilizer — or less.

And don’t skip a single prep step. Most powdered or liquid fertilizers need to be mixed with water.

Timing is important, too. Different species of grass have different needs. Warm-season grasses (Bermuda and St. Augustine) need to be fed when temperatures are warm. Late spring is usually good. Cool-season grasses (Kentucky bluegrass and tall fescue) prefer feeding in cooler temps, such as late fall, but before frost sets in.

#3 Not Watering Grass Deep Enough

Brown and dry, dehydrated grass is ugly. it invites weeds to set up squatting rights. But it’s not just about the ugly.

“If you’re thinking about a future resale, a good lawn is what gets people in the front door,” says Valerie Blake, a REALTOR® in Washington, D.C. A sad lawn just turns them away.

But novice homeowners often think watering a little bit here and a little bit there will suffice. If the grass is wet, it’s watered, right?

Not quite. It’s really a matter of how moist the soil is underneath. Ideally, you want the soil to be moist 6 inches deep.

Here’s how to make sure your lawn gets enough water:

  • Use a shovel to check that the soil is moist 6 inches deep.
  • The first time you water, check every 15 minutes.
  • Keep track of how long it takes to get moist.
  • Water that same amount of time the next time.

How often should you turn on the sprinklers? Do your homework, and, if the Joneses do in fact have a beautiful lawn, note how often they water and follow suit. (We won’t tell.)

#4 Cutting Grass Too Short

If mowing isn’t your idea of weekend fun, you might be tempted to skip a round or two by cutting the grass extra short.

And while cutting the grass shorter may save you from mowing so often, it ends up starving the plant, as sunlight is collected via the leaves. Hello, brown lawn.

“Grass should never be cut lower than two and a half to three inches,” says Granat.

#5 Overusing Weed Killer

“People will buy weed killer thinking it’s for dandelions and clover and will spray it over their whole yard,” Granat says.

“I had a customer who sprayed his whole lawn with weed killer. It killed everything and cost $8,000 to resod the lawn.”

So, only use the weed killer on small, isolated areas, OK? Non-chemical solutions work, too, such as pulling weeds out by hand or dousing them with boiling water.

But prevention is best. Smother them with mulch (add newspapers for an extra layer of protection) before they can take root.

#6 Trimming Limbs and Branches the Wrong Way

Out-of-control bushes can block windows and give insects (and burglars!) a direct path into the house. The solution? Cut them back.

But know where to cut. “Don’t saw it off in the middle of the branch,” says Groft. And don’t cut it flush with the trunk either.

You want to leave the “branch collar” — usually a small bump where the trunk and branch come together.

That bump contains special cells to help a tree or shrub recover from its wounds. Leaving the branch too long or cutting it too short prevents the branch collar from doing its job, which means instead of losing a branch or two, you could lose the entire tree or bush.

#7 Putting Plants Too Close Together

Impatience is really the culprit here. You want a lush yard fast. So you buy more plants and plant them closer together.

That’s a costly mistake. First, you’re buying plants you don’t need. And second, those plants will lose their looks really soon — or even die.

By planting bushes, shrubs, trees, annuals, or perennials closely together, you’re not giving them room to grow. And you’re forcing them to compete with each other for sunshine and nutrients in the soil. You won’t be happy with those results.

Nurseries usually include recommendations on how far apart to plant, but to give you an idea, here are a couple of guidelines:

  • Trees usually need to be planted as far apart as their mature width.
  • Perennials should be 6 to 36 inches apart, depending on their mature size.

It’s also OK to remove existing plants you don’t like. “If you have 30-year-old evergreens crowding a walkway, don’t be afraid to be subtractive,” Groft encourages.

#8 Letting Your Pet Urinate Wherever

It’s so tempting to let Fido go where and whenever he feels like it. But after awhile, you’ll notice yellow grass. Then dead grass. And that bush you planted a couple of months ago? Yeah, it’s half dead, too. They’re being burned alive by your dog’s urine. Not good.

But there are things you can do, such as training Fido to go in one special area. You could even make it a spot without any grass to kill at all.

“I’m starting to install a lot of dog runs for people. They’re all fenced in and we use some kind of stone on the surface,” Granat says.

Advantages of Energy Efficient Upgrades

Adding energy efficient appliances, fixtures, and other systems to your home can not only cut utility costs, but also increase the value of the home.  With a continuously emerging energy efficient marketplace, plus the advent of smart home technology, some homeowners may be wondering where to start and which energy efficient upgrades will yield the best results.

energy efficient

Heating and Cooling

Investing in a smart thermostat can help regulate heating and cooling costs.  Some even sense areas in the home that are hotter or colder and adjust accordingly.  Many smart thermostats can also be controlled remotely.  Stuck at the office?  Make sure your home is not excessively heating or cooling while you are not there.

A smart thermostat, like Nest, has the potential to save between $131 and $145 each year.


Swapping incandescent lights for LED lights can significantly reduce lighting costs.  Older, incandescent lights can cost 11 times more to illuminate than newer LED lights. Incorporating a smart lighting system with motion detection and remote access can also help reduce unnecessary lighting costs, especially when you are away.

LED and smart light upgrades can save between $80 and $120 each year.


Investing in energy efficient washers and dryers will cost more up front but reduce the cost of running the appliance with every load of laundry.  For example, ENERGY STAR washing machines use as much as 25% less electricity than older appliances.

Energy efficient washers and dryers could save between $75 and $125 each year.


The average American household uses 90 gallons of water daily.  Depending on the location and size of the household this figure may vary.  On average, tap waters costs about $0.004 per gallon.  Upgrading to energy efficient appliances can cut down on water consumption, but again will cost more up front to install.  Other consumption-cutting measures include high-efficient faucet aerators or smart home water meters.

Reducing home water consumption may save about $100 each year.

Games, TV, and Other Tech

Your favorite tech toys can be big energy drains, especially when they are plugged in all the time.  Lessen the impact of energy draining game consoles, televisions, and other electronics by plugging everything into a conservation-themed surge protector.  Surge protectors can also protect expensive electronics from power surges like lightning strikes.

Energy efficient surge protectors can save between $60 and $80 each year.

Whether you are moving into a new home, or a current homeowner, energy efficient upgrades have the potential to save big on utility bills and improve the value of your home.  If you have any questions about the value of energy efficient upgrades to your home, consult a real estate professional.


Renovation Refinance: Setting Your Budget and Building Your Team

With low housing inventory creating a competitive housing market, some homeowners are opting the renovation route to turn the house they like into the home they love.  Refinancing with a renovation loan can help homeowners finance home improvements without taking on additional high-cost lines of credit.  Purchasing a home with a renovation loan can help potential home buyers expand their search and, in some cases, pay less for a fixer-upper to customize, compared to a move-in ready home.  Before considering a renovation loan, it is best to weigh your options, set a budget, and build the right renovation team.

renovation refinance

Is renovation right for you?

Renovation loans are available to homeowners looking to upgrade their current home or home buyers shopping for a home in need of repair or remodel.  Renovation loans combine the cost of mortgage financing with the expected cost of the renovation into one monthly mortgage payment.  In many circumstances, a renovation loan will carry a lower interest rate than a personal loan or credit card.  For homeowners, a renovation refinance may be the perfect solution to upgrade their current home rather than moving, especially if they like their neighborhood and would like to avoid shopping in a competitive market.  For home buyers, buying with a renovation loan could allow them to expand their search to fixer-uppers and homes in need of repair, and finance the exact remodel they want.

Setting a Budget

With most renovation loans, a home inspection will determine the cost of the needed repair and remodel.  Many different projects may qualify for renovation financing including required repairs like roof replacement, mold remediation, and foundation repair, or optional repairs like room addition, kitchen remodel, or energy efficiency upgrades.  Real estate professionals suggest renovation projects be proportionate with the value of the home.  For example, a kitchen makes up 10% to 15% of the home’s value.  So, a kitchen remodel on a $200,000 home should not exceed $30,000.  Renovation loan restrictions vary from lender to lender and from project to project.  Before pursuing renovation financing, the homeowner or home buyer should get an appraisal on the value of the home and the expected cost on the project.

Building a Renovation Team

Most renovation loans require a licensed contractor to complete the renovation project.  Depending on the type of loan and the lender these restrictions may vary.  Once the needed project has been established and estimated, the homeowner or home buyer can start building their renovation team.  Ask a real estate professional for recommendations!  Chances are an established real estate agent or lender has clients who have worked with reputable contractors and construction services before.  A lousy contractor can quickly turn a simple remodel into a more complicated repair.

The biggest challenge home buyers are expected to face in 2018 is limited housing inventory.  With demand outpacing supply, home prices are on the rise and many sellers are receiving multiple offers on a home.  Renovation financing is a great option for homeowners in need of an upgrade, or home buyers needing to expand their search market.  Through a renovation refinance, homeowners can stay in their home and finance needed repairs.  Using a renovation loan for a new purchase allows some home buyers to save on the purchase price with a more affordable home plus finance remodeling and upgrades into the cost.  Before deciding if renovation financing is right for your situation, it is best to consult a mortgage professional.