Whether you’re a novice chef or an avid microwaver, the kitchen inevitably becomes a centerpiece for any home and lifestyle. And for that reason, when it comes time to renovate your kitchen, there can be a lot of accompanying stress. But not to fear, a kitchen remodel is not only great for your home’s functionality and aesthetic, it can also become a significant return on investment down the line. So you’ve done the research and have chosen a kitchen remodeler that you love — now what?
Once you decide who you want, Modernize is here to help you figure out how to best pay for the project.
A kitchen remodel is an investment that can give your home an entirely new look while also extending its longevity. The cost of the project has a large scope, depending on what all you’re looking to do — starting as low as $4,000 and branching out into the $40,000 range. It all depends on the work being done and the types of materials being used, but the average cost is around $25,000. Below, find a roundup of costs you need to anticipate:
Downlow on the Down Payment
Kitchen remodeling projects can vary depending on the extent of the project. From new countertops and a fresh coat of paint, to repairing or altogether replacing appliances, and don’t forget cabinets and flooring!
It’s important to discuss your options and kitchen remodel budget ahead of time with a contractor since the cost in both materials and labor can stack up fast. Depending on the type of work being done and how much of it is custom— like cabinetry for example — a contractor may request a down payment. Typically those start at about 30 percent of the final quote.
There are some cases where a kitchen remodeling contractor will offer a discount for paying in cash, but you should use caution. When a contractor requests a large cash payment upfront, it can be a scam and risk homeowners losing money with no protection. Make sure to vet your contractors effectively before deciding to hire.
Dollars and Cents
The best way to secure the fairest price for your kitchen remodeling project is to compare multiple contractor quotes. That’s why Modernize encourages homeowners to get multiple estimates before making a final decision.
When it comes to kitchen remodeling, financing is also an option. There are a number of personal loan lenders that offer competitive rates for kitchen remodeling projects. Additionally, your contractor might have a preferred manufacturer that they work with to provide you with a payment plan. Just be sure to stay mindful of the interest rates.
If you want to pay for your kitchen remodel through a payment plan, your contractor might offer their own so you don’t have to go through a bank. If you do end up going through a bank, make sure to learn about all of the financial incentives available to you both directly and indirectly in the form of loans or tax credits. For instance, making the upgrade to energy-efficient kitchen appliances — like your refrigerator and dishwasher — can end up coming with financial rebates and incentives.
Understand Your Equity Options
Home Equity Line of Credit (HELOC)
A home equity line of credit, otherwise known as a HELOC, allows homeowners to borrow money against their home’s equity. HELOCs are generally flexible but limited by a home’s value, and they also carry the risk of foreclosure.
A common reason homeowners take out a HELOC is for home improvement projects, including kitchen remodeling.
Home Equity Loan
If a HELOC doesn’t seem like the right fit, the other option is a home equity loan – which lets a homeowner borrow money against the value of a home over the amount of any or all mortgages levied against the property. It’s sort of like a second mortgage, positioning the home itself as the security for the loan.
Whatever options you decide on, financing a kitchen remodel is a big step. This means it makes sense to talk the decision over with people you trust like friends or family in addition to your contractor. Their experience with homeowners in the area and specifically as it pertains to kitchen remodeling projects will be valuable when it comes time to determine your best path forward.