It’s very exciting that you have a set a course to upgrade or replace your windows, and in doing so will be increasing the value of your home and saving on your utility bills. And while your conversations with your contractor are exciting, it’s important to find time to look at the numbers and complete the process of budgeting your windows project.

Creating a budget for a relatively costly home improvement project like a windows replacement installation can seem intimidating — you’re in the right place to find guidance on how to best manage and create a budget for your investment in your home. There are simple paths you can take to simplify and ease your journey.

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Budgeting for Windows

Replacement windows are an investment for homeowners. Replacement windows can cost an average of $300 to $750 per window, depending on the window type and brand.  Homeowners can find the best budget for their project by negotiating the final contract price and terms with a window contractor they trust. Further, it’s okay to expect the contractor to handle the bulk of the work in reducing costs before your windows upgrade project even begins—after all, one of their value propositions is expertise in the field and local knowledge about getting the most out of local, state, and federal rebates and incentives.

That all amounts to a big leg up.

At Modernize, we frequently speak to homeowners about their home improvement projects. Budgeting your project is stressful and we get that: The first step is to be sure you can afford this system you’re planning to install, based on factors like your cash flow, your assets, and what the return will be on your investment.

Enter the budget.

How Much Can You Afford?

It could also be lucrative to finance your own window replacement.  

Calculate your income and your expenses, your needs and your wants, and find the figure of money you could theoretically put aside for an investment in your home. Your experienced contractor is one of your most important initial sources on how to best determine what that investment should look like from outside your personal goals—be sure to consult them for that piece of the pie but remember this is your project (and your money) so it’s okay to be a little selfish and somewhat frugal to achieve your ends.

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What Is Your Home Equity?

If and when you decide to finance your own windows replacement, your home equity could play a pivotal role in everything from your loan amount to your interest rate. Simply put, your equity is the difference between what you owe on your home or property and the appraised (or market) value determined for it.

The more of your mortgage you’ve already paid, for example, the higher your equity in the given property. And the more equity you hold in your home, the more powerful you are as a borrower, especially when it comes to purchasing power, or the financial ability to buy (or purchase) things.

What Is Your Credit Rating?

From your credit score to your existing savings, purchasing power, and other ongoing loans, various financial institutions will have slightly different scales by which to determine your eligibility for a home improvement loan. And while some programs are certainly designed to be on your side—like the HomeStyle Energy Program or the Title I Property Improvement Loan—you’re going to be paying back in some way.

One of the most significant markers of your financial health—as determined by financial institutions, anyway—is your credit score. Plainly put, a credit score “predicts how likely you are to pay back a loan on time,” according to the Consumer Financial Protection Bureau. Companies use proprietary scoring models to calculate your credit score based on information from your credit reports, which essentially break down your “credit activity and current credit situation, such as loan paying history and the status of your credit accounts.”

Knowing your credit rating and how you’ll be considered as a borrower will go a long way in helping you determine how much you can afford as you budget for windows.

Be Real About Your Home Window Needs

When surveying homeowners, we often hear that ahead of a windows-related home improvement project, people are often misinformed about how to determine what they should focus on like window styles, frames, siding, and so on. Not to mention, the windows market is a wide one and includes many common names and brands you might trust for other products — take some time to familiarize yourself with the best window brands out there.

You likely already have a solid idea of what this project will entail based on what your contractor has shared with you. And while their goals might be completely in your favor and aim to maximize the increase in your home value, they might not necessarily align with your personal goals. Be sure to communicate your own priorities with your contractor.

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It all comes down to trusting a contractor—and that also means a contractor trusting you. The more upfront you are about what you want to do and your financial limits, the better a contractor will be able to hone in on the best type of budget to build for your windows replacement, upgrade, or initial installation. It might not result in the pie-in-the-sky home improvement or exponential home value you dreamed of, but it will result in the best value you’ll get for the money you’re able to invest.

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