Is your home looking a little weathered? Or perhaps it needs some upgrades before it can be put on the market for sale? If so, home improvements can increase the value and aesthetic feel of your home, but how do you know if a home renovation is right for your budget?

If you plan to stay in your home for five years or more, invest what you can afford for quality upgrades. If you’re planning to sell, take a different approach and identify any structural issues first, then deal with cosmetic improvements. Bottom line: focus on getting back the maximum return on your investment.

Have a project in mind? Let’s figure out how much money can you afford to spend on it.

A home equity line of credit (HELOC) can be useful if you’re planning a major project with multiple expenses or if you want ongoing access to funds. HELOCs feature flexible repayment options and the rates are typically lower than credit cards.

Any loan you take out for remodeling should still allow you to keep your total monthly housing costs under 28% of your gross income. That’s a typical rule of thumb for home-related, or front-end expenses. These costs include payments on the loan principal and interest, private mortgage insurance, hazard insurance, property taxes, and homeowner's association dues.

Here are some quick tips when budgeting for a home makeover:

• Get pre-approved for a home equity loan or line of credit before you sign any paperwork with contractors or make decisions on project plans.
• Make your goals and budget clear to contractors you interview for the remodeling job. Ask for references and look into online reviews.
• When choosing a contractor, don't just pick the lowest price. Make sure the contractor you choose can stay on time and on budget and also is reputable.

We'll help you do the math and determine what you can afford. Visit our online Mortgage Center, or stop by your local Horizon Bank branch today for a consultation to learn more about what is the best option for you. We’ll help make your home improvement project a little easier.