Budgeting for Your Cabinet Project
If you’ve been thinking of ways to upgrade the look of your kitchen, while increasing the value of your home, embarking on a cabinet project can be an exciting way to change the footprint of that area. However, while you’re speaking to a potential cabinet installer, it’s important not to let your excitement about updating your kitchen cause you to forget about the cost. It’s important to complete the process of budgeting for your cabinet project before making any decisions and moving forward.
Although creating a budget for your cabinet project may seem intimidating, you’re in the right place for guidance on how to best manage and create a budget for this important investment in your home. There are simple steps you can take to streamline the process and make your journey a lot easier and more enjoyable.
Budgeting for Cabinets
Getting new cabinets can be quite an investment—which may add up quickly depending on the type that you get as the costs vary widely based on variables like size, materials, design, and modification options. For example, semi-custom cabinets cost between $150 and $650 per linear foot, while custom cabinets generally cost between $500 and $1,200 per linear foot. Also, stock cabinets can cost between $100 and $300 per linear foot. In addition, homeowners can expect to pay $40 to $60 per linear foot for installation labor. In order to determine the best solution for your home, do your research and leverage your contractor’s expertise so you get the most for the amount of money you want to spend.
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 the cabinets you’re planning to install, based on factors like your cash flow, your assets, and what the return will be on your investment.
In other words, your budget is comprised of some simple math. After consulting with your cabinet installer, the following is what you need to figure out.
Calculating What You Can Afford
Calculate your income and your expenses, your needs and your wants, and find the figure of money you could theoretically put aside for this investment in your home. An experienced cabinet 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, but remember this is your project (and your money) so it’s okay to be a little selfish and somewhat frugal to get what you want.
What Is Your Home Equity?
If and when you decide to finance your own cabinet installation, 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 with 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 new cabinets.
Be Real About Your Cabinet Needs
Homeowners have shared through surveys that trying to decipher the complex elements of their cabinet project left them seeking more professional support—which our homeowners found with Modernize.
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, they might not necessarily align with your personal or aesthetic goals. Be sure to communicate your own priorities with your contractor before beginning your cabinet project.
It all comes down to trusting your cabinet installer—and that also means your contractor should be able to trust 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 for your cabinet needs. It might not result in the cabinets of your dreams, but it will result in the best value you’ll get for the money you’re able to invest.