The United States Department of Housing and Urban Development provides advice to homeowners on what to consider when deciding to upgrade or improve your home.
Protect Your Housing Investment
Your home is an investment in living as well as in savings. It will pay no dividends if neglected. If properly maintained and improved, it will pay a high yield in comfort and usefulness for your family and in avoidance of costly repair bills.
Home improvements also tend to raise neighborhood standards and, as a result, property values. From an economic standpoint, home improvements mean higher employment, increased markets for materials and home products-and therefore a more flourishing community.
If You Do It Yourself
If you are handy with tools and have the experience, you can save money by doing many jobs yourself. Unless you are skilled in wiring, plumbing, installing heat systems, and cutting through walls, you should rely on professionals for such work.
It pays not to skimp when you buy the required materials. Good materials are not necessarily the most expensive. What you need are products that look good, are easy to maintain, and last a long time. Buy only from reliable dealers.
If You Use a Contractor
If you plan to use the services of a dealer or contractor, take care to choose one with a reputation for honesty and good workmanship. If your contractor is going to arrange for financing your loan, find out which lender he uses.
Before deciding on a contractor, you may want to get bids from two or three different firms. Make sure that each bid is based on the same specifications and the same grade of materials. Find out why if these bids vary widely.
Many contractors offer package plans that cover the whole transaction. Under such a plan the contractor provides all materials used, takes care of all work involved, and arranges for your loan.
Your contractor can make the loan application for you, but you are the one who must repay the loan, so you should see that the work is done correctly.
Understand What You Sign
The contract that both you and the contractor sign should state clearly the type and extent of improvements to be made and the materials to be used. Before you sign, get the contractor to spell out for you in exact terms:
- How much the entire job will cost you.
- How much interest you will pay on the loan.
- How much you will pay in service charges.
- How many payments you must make to pay off the loan, and how much each of these payments will be.
After the entire job is finished in the manner set forth in your contract, you sign a completion certificate. By signing this paper you certify that you approve the work and materials and you authorize the lender to pay the contractor the money you borrowed.
Beware of Fraud
Most contractors and dealers conscientiously try to give their customers service equivalent to the full value of their money. Unfortunately, home improvement rackets do exist. Here are a few common sense rules to follow:
- Read and understand every word of any contract or other paper before you sign it.
- Never sign a contract with anyone who makes fantastic promises.
- Reputable dealers are not running give-away businesses.
- Avoid wild bargains. The best bargain is a good job.
- Never consolidate existing loans through a home improvement contractor.
- Do not let salespeople high-pressure you into signing up to buy their services or materials.
- Be wary of salespeople who try to scare you into signing for repairs that they say are urgent. Seek the advice of an expert as to how urgent such repairs are. High-pressure and scare tactics are often the mark of a phony deal.
- Avoid salespeople who offer you trial purchases or some form of bonus, such as cash, for allowing them to use your house as a model for any purpose. Such offers are well-known gimmicks of swindlers.
- Never sign a completion certificate until all the work called for in the contract has been completed to your satisfaction. Be careful not to sign a completion certificate along with a sales order.
- Proceed cautiously when the lender or contractor demands a lien on your property. Most lenders do not require a lien if the loan amount is less than $7,500.