Investing in your home can be a wise choice. If you’re struggling to find the money for a large project, you might consider a home equity loan. Obtaining a home equity loan requires you to come up with 20% of your home’s value as a down payment. A home equity loan is secured by your home, so if you default, the loan will go to the lender.
If you want to improve your home’s value, you should make sure to hire a licensed contractor. In New York City, a contractor must be licensed by the Department of Consumer Affairs. You’ll also need to make sure your contractor has the proper insurance. Ask for references and ask your neighbors.
A contractor should be able to make you feel comfortable. Home improvement companies should be willing to offer you a variety of services to suit your needs. They should be honest with you. In many counties, engaging in “home improvement” without a license is a Class A misdemeanor, punishable by a fine of $500 to $5,000.
Most states have a home improvement tax exemption. However, your project may not qualify. You should check with a CPA to make sure.
You should also make sure to establish a payment plan before hiring a contractor. The payment schedule may involve an initial down payment and incremental payments until the job is done. You can also set up an escrow account. An escrow account is a separate account you use only to pay for the work until it is completed.