Finance Options for Home Improvement as Your Family Grows

Many families are making the choice to go beyond the traditional two child family, but finding enough room for more children poses a problem. Moving is often a hassle that is best avoided for both time and financial reasons. Whether a family is adding their first child or their fifth, additions and renovations can help accommodate a growing family.

Renovations

Renovations are the cheaper choice in home improvement that help accommodate a growing family. However, renovations do not add any room to an existing house. This choice is generally recommended for families that have unusable space that can be converted into living space.

Good-parenting-skillsAttic Renovations: Attic renovations are the perfect way to give older children their own bedroom when a new baby is arriving. One of the biggest benefits of an attic renovation is that it keeps children close by while allowing them to have their own individual space.

This type of renovation generally costs around $44,000 and adds value to a home in case the family decides to move in the future. Although the cost may seem daunting, attic renovations retain an average of 80 percent of their value.

Basement Renovations: Basements are generally farther away from the bedrooms in a house than an attic. Basement bedrooms are great for teenagers, although they may also be used to add a play area to the home, if bedroom space is not an issue. These renovations are more expensive than attic renovations, averaging a cost of $57,000 and retaining approximately 79 percent of their value.

Additions

Additions are more expensive because they involve adding a completely new construction. However, more space may be necessary if a family is currently living in a small space and cannot simply renovate existing space to accommodate a growing family.

The total cost of an addition depends on variables such as the size of the addition, the type of land being used for the addition and how the addition will need to be added to the existing home. Additions start at about $14,000 and range all the way up to $150,000. It is important to note that this cost only includes the construction; any furniture or decor will be an additional cost.

Financing Options

Once a family decides between a renovation or an addition, financial considerations must be examined. A loan will probably be necessary. There are a few home improvement financing options available to homeowners.

Home Equity Loan: This is an open line of credit that is based on the equity a homeowner has in his own. Because it is based on existing equity, it is easier to qualify for than other types of loans. Since homeowners have the option to access funds through a home equity loan as needed, this type of financing is ideal for long term projects that do not have a concrete budget.

Second Mortgage: A second mortgage allows a homeowner to borrow a large amount of money, making it ideal for large additions. However, homeowners should be aware that the interest rate on a second mortgage generally runs higher than the rate on their original mortgage.

The qualification process for a second mortgage is relatively simple compared to other loan qualifications, although homeowners will need to provide proof of income and will need to have an acceptable credit score. This type of financing is best left for very large projects because it involves a high amount of debt.

Refinanced Mortgage: While a refinanced mortgage is not a type of loan, it can allow a homeowner to have access to more money through lowered mortgage payments. Refinancing often saves homeowners hundreds of dollars every month. This money can be used towards home improvement projects, allowing a homeowner to expand their living space without taking on more debt.

Expanding families often need more space in their homes. Moving can be an expensive hassle, but additions or renovations to an existing home give homeowners the option to stay put while accommodating their growing family.If you need more space in your home, another option would be putting items you don’t use often in a storage facility. If you’re in the New York City area, some storage companies will arrange for storage pickup in Manhattan.

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