Every time you walk into your kitchen, do you think about what you want to change? Are there parts of your kitchen that you’ve always just decided to live with, but never really enjoyed? But the big question when it comes to a change like that is budgeting: kitchen remodels can cost quite a bit, and that cost can balloon quickly if you’re not careful. That’s why it’s so important to pay close attention to what you really want in your kitchen, what your intentions are for the space– whether you intend to live there for a while or sell the house – and what you can “settle” for if the budget is just too tight.
Knowing what to expect from the average cost of a kitchen remodel can help you get a good starting point. Research into appliances, what various materials cost, and what contractors in your area charge for their labor can all help you figure out a bottom line when budgeting a kitchen remodel.
Budgeting for Your Kitchen Remodel
Before we dive into how much your budgeting, let’s take a look at how much a kitchen remodel costs. According to Remodeling Magazine’s 2020 Cost vs. Value Report, a minor kitchen remodel– one that includes replacing the cabinet and drawer fronts, laminate countertops, new flooring, and new appliances – has a national average cost of $23,452. A more luxurious remodel with higher quality products could runs an average of $68,490. And if you have a larger home and want a mind-blowing kitchen with all the bells and whistles, your cost could climb to well over $100,000.
It’s important to remember that for most, the kitchen remodel they want will fall in that lower range. There are almost always ways to “cut corners” with your budget that no one but you or the contractor would ever notice, such as keeping the existing kitchen cabinet boxes and simply replacing the fronts. Want to go even cheaper? Consider resurfacing or painting the existing cabinet doors for even bigger savings. When it comes to budgeting for your kitchen remodel, now is the time to research the variety of materials and options. You’ll find a surprisingly wide range!
What Can You Afford?
As you research the materials you might want to use, dive into online design programs that can help you reconfigure the shape of your new kitchen, or even look at appliances that have the fun elements you want while staying energy efficient, keep the price tags in mind. At the same time, sit down to take a hard look at your income and do an inventory of your financial assets. How much money do you have to devote to this project? You don’t want to deplete your savings, but might there be enough in there to keep a healthy cushion while still getting the kitchen of your dreams – or at least something close to it?
It’s also important to consider what you want to do with your home in the coming years. Are you going to sell it? Then you might want to speak with a realtor about which investments in the kitchen will pay off most in the long run. If you’re planning to stay in the house for a while, consider what elements matter most to you. For instance, is universal design on your radar? Or are you simply looking for nicer countertops and higher-end appliances? At this point you should be looking at your finances and the kitchen options while your future plans are in the back of your mind.
What Is Your Home Equity?
A lot of people simply can’t afford to write the big check it might cost for a kitchen remodel. In that case, moving money around from other places might be the right answer. One of those options is to tap into your home equity. A simple definition of home equity is this: the difference between what you actually owe on your property versus what it might bring in on the open market. This means the longer you’ve owned your home and the lower the mortgage you owe, the more home equity you will typically have. Your bank can tap into that equity and allow you to take a loan out against it, thus freeing up money to put into your kitchen remodel.
Since every financial situation and mortgage is unique, it’s important to speak to your bank about what your home equity might be, how you can use it, and what it means for you in the long run in a financial sense.
Know and Understand Your Credit Rating
No matter how you choose to budget and pay for your kitchen remodel, there’s one point that will certainly come up (unless you’re paying entirely in cash), and that’s your credit score. Whether it’s home equity, a home loan, a personal loan, or any other financial product, someone is going to look at your credit rating to help determine your creditworthiness.
What does this mean? The Consumer Financial Protection Bureau puts it simply: a credit score is a way to predict “how likely you are to pay back a loan on time.” Any bank, credit card company, or other institution that pulls your credit report will look at several factors, such as how often you pay your bills on time, how much credit you already have available, how much of it you use month to month, and more. It’s important to see what they see, so now is the time to pull your credit reports for free. Take a look at what’s on there and dispute anything that looks fishy.
Get Realistic About Your Kitchen Remodeling Budget
Now that you know more about what you can afford, whether you intend to tap into your home equity, and what your credit score might mean for getting a loan for your project, it’s time to go back to that initial budget and look at it with a critical eye. What’s your bottom line? What changes in materials, floor options, countertops, and the like will get you there? Now is the time to call in a contractor to help you make these decisions. Modernize can connect you with contractors in your local area who can help you with your kitchen remodel, from budgeting to completion.