Get set to remodel your home

Preparing ahead can help ensure your home improvement project doesn't end up costing you more than you bargained for.

Remodeling your home can enable you to turn your current house into the home of your dreams. But before you get started, there are some steps you can take to help ensure the process goes smoothly.

Make a list
Start by making a specific list of what you want to remodel. If you need more room, this may mean adding an addition. If you just want to change the look of your home, this may simply mean redecorating. Making a list of the key things you want to accomplish will enable you to do some research and create a realistic budget. It will also help you to clearly convey your wishes to any professionals you hire. Consider such things as:

• Building a family room
• Adding a new bathroom
• Enlarging your kitchen
• Laying new carpet
• Installing hardwood flooring
• Painting the interior and/or exterior

Consult a designer
If you want to significantly remodel your home, it’s a good idea to consult a designer. A designer can draw up plans for the project and estimate costs. He or she can suggest ways to make the most of your space and your budget and may be able to recommend professionals to carry out the work. The money you pay to a designer will be well worth it if it enables you to avoid making costly mistakes down the road.

Arrange financing
If you have built up a fair amount of equity in your home, you may want to consider financing the remodeling of your home with a home equity loan. A home equity loan is secured by the value of your property so you can get a favorable interest rate -- usually below the rate for a regular personal loan, and well below credit card rates. Most lenders will lend you an amount equal to 100 percent of your home value, and some will even lend up to 125 percent if you have a good credit score.

Cash-out refinancing is another popular way of freeing up cash to pay for remodeling your home. It involves refinancing your mortgage for more than you currently owe and “cashing out” the difference.

Discuss the various options with your lender. And remember to include any additional expenses you may require. This might include the cost of alternative living arrangements if you are going to have to leave your home for an extended period during the construction.