• Renovating the home in challenging times

    It is not surprising that during these slower real estate times, all Canadians are watching their pocketbooks. The higher mortgage rates and costs for nearly everything have had a huge effect on our economy. Since the housing and mortgage market have slowed, this downturn has significantly impacted renovations. “Sales are just critical for a lot of remodelling activity” (from a senior researcher at The Harvard University Joint Center for Housing Studies). What does this mean? Homeowners are deciding to stay put. By staying home, renovations become the next factor while living comfortably. Many Canadians are choosing to renovate as their mortgage matures, but homeowners will need to adjust their expectations when confronted with higher material and labour costs. In Canada, the average family has been spending less on renovation costs over the last three years.

    How to plan renovations smartly

    1. Save earlier

    Saving during these rising prices is not easy. If you can plan ahead while you still have two or three years left on your cheap mortgage rate, try to save or reduce costs to have cash on hand for future renovations.

    2. Maintenance should be a priority

    Start with early maintenance to minimize current costs that could escalate significantly later. Develop a detailed plan for what needs to be done. Initially, consider items such as the roof, foundation, plumbing, and electrical systems. Secondly, assess other renovations and improvements to the home layout, especially those that may add market value. Once the plan is set, obtain several professional estimates from contractors to approximate the cost of these proposed updates.

    3. Talk to a mortgage specialist

    How will proposed modernizations appear with a refinanced mortgage? Is it affordable within the household budget? If not, consider eliminating some refurbishment items or extending the amortization to make mortgage payments more manageable. A mortgage professional can provide critical advice and assistance in these areas.

    4. Plan for projects going over budget

    Research suggests that, on average, home renovation budgets exceed by 30%. This often occurs due to higher material costs and unforeseen circumstances. Plans rarely go perfectly, so consider the old saying, “prepare, do not plan.”

    If you are considering overhauling your home, prepare and plan to ensure you take care of the most important people: yourselves.

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