Budget Kitchen Remodeling: 5 Money-Saving Steps!

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Budget Kitchen Remodeling: 5 Money-Saving Steps

Can't afford an entire kitchen remodel in one fell swoop? You can complete the work in 5 budget-saving stages (and still cook dinner during the down time).

Major kitchen remodels are among the most popular home improvements, but a revamped cooking and gathering space can set you back a pretty penny. According to "Remodeling" magazine's 2015 "Cost vs. Value Report," a major, 200-square-foot kitchen remodel costs $56,768, with a 67.8% return on investment come selling time.

If you can’t come up with all that cash or take out a loan to do the remodel in one shot, a good strategy is to proceed in stages. By breaking down the kitchen remodeling process, you’ll be able to proceed at your own pace, as time and money allow.

Related: Stress Less! 6 Things You Can Do for an Anxiety-Free Remodel

Stage One: Start with a Complete Design Plan 

Your plan should be comprehensive and detailed — everything from the location of the refrigerator to which direction the cabinet doors will open to whether you need a spice drawer.

To save time (and money) during tear-out and construction, plan on using your existing walls and kitchen configuration. That’ll keep plumbing and electrical systems mostly intact, and you won’t have the added expense — and mess — of tearing out walls.

Joseph Feinberg, vice president of Allied Kitchen and Bath in Fort Lauderdale, Fla., recommends hiring a professional designer, such as an architect or a certified kitchen designer, who can make sure the details of your plans are complete. You’ll pay about 10% of the total project for a pro designer, but you’ll save a whole bunch of headaches that would likely cost as much — or more — to fix. Plus, a pro is likely to offer smart solutions you hadn’t thought of.

For a nominal fee, you also can get design help from a major home improvement store. However, you’ll be expected to purchase some of your cabinets and appliances from that store.

• Cost: professional designer: $5,800 (10% of total)

• Key strategies: Once your plans are set, you can hold onto them until you’re ready to remodel.

• Time frame: 3 to 6 months

Read on to learn more budget kitchen remodeling tips:

Stage Two: Order the Cabinets, Appliances, and Lighting Fixtures
Stage Three: Gut the Kitchen and Do the Electrical and Plumbing Work
Stage Four: Install Cabinets, Countertops, Appliances, Flooring, and Fixtures
Final Phases: Upgrade if Necessary

Stage Two: Order the Cabinets, Appliances, and Lighting Fixtures

Cabinets and appliances are the biggest investments in your kitchen remodeling project. If you're remodeling in stages, you can order them any time after the plans are complete and store them in a garage (away from moisture) or in a spare room until you're ready to pull the trigger on the installation.

Remember that it may take four to six weeks from the day you order them for your cabinets to be delivered.

Related: How to Choose Stock Cabinets for Your Kitchen

If you can't afford all new appliances, keep your old ones for now -- but plan to buy either the same sizes, or choose larger sizes and design your cabinets around those larger measurements. You can replace appliances as budget permits later on.

Related: Appliance Buying Guides

The same goes for your lighting fixtures: If you can live with your old ones for now, you’ll save money by reusing them.

You’ll have to decide about flooring, too — one of the trickier decisions to make because it also affects how and when you install cabinets.

You’ll need to know if your old flooring runs underneath your cabinets, or if the flooring butts up against the cabinet sides and toe kicks. If the flooring runs underneath, you’ll have some leeway for new cabinet configurations — just be sure the old flooring will cover any newly exposed floor areas. Here are points to remember:

• Keep old flooring for cost savings. This works if your new cabinets match your old layout, so that the new cabinets fit exactly into the old flooring configuration. If the existing flooring runs underneath your cabinets and covers all flooring area, then any new cabinet configuration will be fine.

• Keep your old flooring for now and cover it or replace it later. Again, this works if your cabinet configuration is identical to the old layout.

However, if you plan to cover your old flooring or tear it out and replace it at some point in the future, remember that your new flooring might raise the height of your floor, effectively lowering your cabinet height.

For thin new floor coverings, such as vinyl and linoleum, the change is imperceptible. For thicker floorings, such as wood and tile, you might want to take into account the change in floor height by installing your new cabinets on shims.

• Cost: cabinets: $16,000 (27% of total); appliances and lighting fixtures: $8,500 (15% of total); vinyl flooring: $1,000 (2% of total)

• Key strategy: Keep old appliances, lighting fixtures, and flooring and use them until you can afford new ones.

• Time frame: 2 to 3 weeks

Stage Three: Gut the Kitchen and Do the Electrical and Plumbing Work

Here's where the remodel gets messy. Old cabinetry and appliances are removed, and walls may have to be opened up for new electrical circuits. Keep in close contact with your contractor during this stage so you can answer questions and clear up any problems quickly. A major kitchen remodel can take six to 10 weeks, depending on how extensive the project is.

During this stage, haul your refrigerator, microwave, and toaster oven to another room — near the laundry or the garage, for example — so you've got the means to cook meals. Feinberg suggests tackling this stage in the summer, when you can easily grilland eat outside. That’ll reduce the temptation to eat at restaurants, and will help keep your day-to-day costs under control.

• Cost: $14,500 for tear-out and installation of new plumbing and electrical (25% of total)

• Key strategies: Encourage your contractor to expedite the tear-out and installation of new systems. Plan a makeshift kitchen while the work is progressing. Schedule this work for summer when you can grill and eat outside.

• Time frame: 6 to 10 weeks

Stage Four: Install Cabinets, Countertops, Appliances, Flooring, and Fixtures

If you’ve done your homework and bought key components in advance, you should roll through this phase. You've now got a (mostly) finished kitchen.

A high-end countertop and backsplash can be a sizable sum of money. If you can't quite swing it, put down a temporary top, such as painted marine plywood or inexpensive laminate. Later, you can upgrade to granite, tile, solid surface, or marble.

• Cost: $12,000 (21% of total)

• Key strategy: Install an inexpensive countertop; upgrade when you’re able.

• Time frame: 1 to 2 weeks

Final Phases: Upgrade if Necessary

Replace the inexpensive countertop, pull up the laminate flooring, and put in tile or hardwood, or buy that new refrigerator you wanted but couldn't afford during the remodel. (Just make sure it fits in the space!)

Related: Why White Kitchens Stand the Test of Time

By: Gretchen Roberts

Read more: http://members.houselogic.com/articles/budget-kitchen-remodeling-advice/preview/#ixzz3inmaWKtC 

An Expert In Your Court
Robert De La Rosa
"CALL NOW 909.271.5640"
"Get Qualified Now By A Loan Professional" 

www.TheCaliforniaPropertyConnection.biz 

Coldwell Banker Town & Country
501 W. Redlands Blvd
Redlands CA, 92373

CalBre 01435824

Realtor.com®: 'This Is No Housing Bubble!

DAILY REAL ESTATE NEWS | WEDNESDAY, APRIL 29, 2015

Home prices are rising at a more rapid pace than they were just a few months ago, as demand outpaces supply. Existing-home sales surged 9 percent year-over-year in March and home prices were up 8 percent over last year, according to the National Association of REALTORS®. What’s more, with tight inventories plaguing many markets, the median list price in March climbed 11 percent over last year, reaching $220,000, realtor.com® reports.

Existing-home sales report:Home Sales Surge to 18-Month High

With home prices heating up again, could the housing market be heading for another bubble?

“During the peak years of the housing bubble, from 2003 to 2005, the data on supply versus price appreciation looked very similar to what we are seeing now,” writes Jonathan Smoke, realtor.com®’s chief economist, in recent commentary at the site. “But there are key differences, which is why I’m confident that on the national level, this is no bubble.”

Smoke says these home price increases will stick because the market is correcting for severe price declines in the recent past. Prices rose 7 percent and 12 percent in 2012 and 2013, respectively. Median prices have climbed less than 8 percent on a compounded annual basis over the past three years. On the other hand, from 2002 to 2005, median prices rose 10 percent on a compounded annual basis – and had no justification of a bounce from a prior decline, Smoke says.

“On an inflation-adjusted basis, we are 30 percent beneath the peak set in 2005,” Smoke notes. What’s more, “relative to rents or incomes, median home prices are not ‘unhinged’ from long-term averages,” Smoke writes. In 2005, the price-to-rent ratio was 35 percent higher. Currently, the price-to-income ratio is where it was in 2001 and it is about 30 percent below where it was in 2005.

Smoke also notes that during the housing bubble, mortgage financing saw rapid expansion, and flipping activity based on speculative investing soared—neither of which are occurring now.

“Today’s higher prices are only to be expected as the economy improves and first-time buyers gradually return to the market,” Smoke writes. “Eventually, those higher prices should encourage more owners to list their homes and builders to start construction on new housing—which in turn should solve the problem of supply.”

Source: “Home Prices Are Climbing Faster and Faster, but This Is Not a Bubble,” realtor.com® (April 24, 2015)

An Expert In Your Court
Robert De La Rosa
"CALL NOW 909.271.5640"
"Get Qualified Now By A Loan Professional" 

www.TheCaliforniaPropertyConnection.biz 

Coldwell Banker Town & Country
501 W Redlands Blvd
Redlands CA, 92373

CalBre 01435824

Mortgage Rate Fluctuations Have Big Impact! www.TheCaliforniaPropertyConnection.biz

DAILY REAL ESTATE NEWS | THURSDAY, MARCH 12, 2015

Even the slightest movement in mortgage rates can translate into more – or less – purchasing power for your clients.

Read more: Mortgage Rates Drop, Near 2013 Lows

John Burns Real Estate Consulting recently looked at how the fluctuation in rates effects the average consumer. The firm found that a typical family earning $60,000 a year could afford around $1,800 month for the mortgage payment.

In 2000, a 30-year fixed-rate loan, which averaged an 8 percent mortgage rate, would have qualified that family for a $245,000 loan.

But at a 4 percent mortgage rate – which current rates are averaging – that same family can qualify for a $377,000 loan.

"In other words, each 1 percent drop in interest rates in the last 15 years has allowed home sellers to raise the price 12 percent," according to Jon Burns Real Estate Consulting’s analysis.

Source: "How Tiny Mortgage Rate Moves Can Buy You a Lot," CNBC (March 10, 2015)

An Expert In Your Court
Robert De La Rosa
"CALL NOW 909.271.5640"
"Get Qualified Now By A Loan Professional" 

www.TheCaliforniaPropertyConnection.biz 

Coldwell Banker Town & Country
501 W Redlands Blvd
Redlands CA, 92373

CalBre 01435824

www.TheCaliforniaPropertyConnection.biz

4 Tips to Determine How Much Mortgage You Can Afford

By knowing how much mortgage you can handle, you can ensure that homeownership will fit in your budget.

Homeownership should make you feel safe and secure, and that includes financially. Be sure you can afford your home by calculating how much of a mortgage you can safely fit into your budget.

Why not just take out the biggest mortgage a lender says you can have? Because your lender bases that number on a formula that doesn’t consider your current and future financial and personal goals.

Think ahead to major life events and consider how those might influence your budget. Do you want to return to school for an advanced degree? Will a new child add day care to your monthly expenses? Does a relative plan to eventually live with you and contribute to the mortgage?

Consider those lifestyle issues as you check out these four methods for estimating the amount of mortgage you can afford.

1.  Prepare a detailed budget.

The oldest rule of thumb says you can typically afford a home priced two to three times your gross income. So, if you earn $100,000, you can typically afford a home between $200,000 and $300,000.

But that’s not the best method because it doesn’t take into account your monthly expenses and debts. Those costs greatly influence how much you can afford. Let’s say you earn $100,000 a year but have $1,000 in monthly payments for student debt, car loans, and credit card minimum payments. You don’t have as much money to pay your mortgage as someone earning the same income with no debts.

Better option: Prepare a family budget that tallies your ongoing monthly bills for everything -- credit cards, car and student loans, lunch at work, day care, date night, vacations, and savings.

See what’s left over to spend on homeownership costs, like your mortgage, property taxes, insurance, maintenance, utilities, and community association fees, if applicable.

2.  Factor in your downpayment.

How much money do you have for a downpayment? The higher your downpayment, the lower your monthly payments will be. If you put down at least 20% of the home's cost, you may not have to get private mortgage insurance, which protects the lender if you default and costs hundreds each month. That leaves more money for your mortgage payment.

The lower your downpayment, the higher the loan amount you’ll need to qualify for and the higher your monthly mortgage payment.

But, if interest rates and/or home prices are rising and you wait to buy until you accumulate a bigger downpayment, you may end up paying more for your home.

3.  Consider your overall debt.

Lenders generally follow the 43% rule. Your monthly mortgage payments covering your home loan principal, interest, taxes and insurance, plus all your other bills, like car loans, utilities, and credit cards, shouldn’t exceed 43% of your gross annual income.

Here’s an example of how the 43% calculation works for a homebuyer making $100,000 a year before taxes:

1.    Your gross annual income is $100,000.

2.    Multiply $100,000 by 43% to get $43,000 in annual income.

3.    Divide $43,000 by 12 months to convert the annual 43% limit into a monthly upper limit of $3,583.

4.    All your monthly bills including your potential mortgage can’t go above $3,583 per month.

You might find a lender willing to give you a mortgage with a payment that goes above the 43% line, but consider carefully before you take it. Evidence from studies of mortgage loans suggest that borrowers who go over the limit are more likely to run into trouble making monthly payments, the Consumer Financial Protection Bureau warns.

4.  Use your rent as a mortgage guide.

The tax benefits of homeownership generally allow you to afford a mortgage payment -- including taxes and insurance -- of about one-third more than your current rent payment without changing your lifestyle. So you can multiply your current rent by 1.33 to arrive at a rough estimate of a mortgage payment.

Here’s an example: If you currently pay $1,500 per month in rent, you should be able to comfortably afford a $2,000 monthly mortgage payment after factoring in the tax benefits of homeownership.

However, if you’re struggling to keep up with your rent, buy a home that will give you the same payment rather than going up to a higher monthly payment. You’ll have additional costs for homeownership that your landlord now covers, like property taxes and repairs. If there’s no room in your budget for those extras, you could become financially stressed.

Also consider whether or not you’ll itemize your deductions. If you take the standard deduction, you can’t also deduct mortgage interest payments. Talking to a tax adviser, or using a tax software program to do a “what if” tax return, can help you see your tax situation more clearly.

By: G. M. Filisko

An Expert In Your Court
Robert De La Rosa
"CALL NOW 909.271.5640"
"Get Qualified Now By A Loan Professional" 

www.TheCaliforniaPropertyConnection.biz 

Coldwell Banker Town & Country
501 W Redlands Blvd
Redlands CA, 92373

CalBre 01435824