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Create a Remodeling Budget Budget Dos & Don'ts Loans & Financing




How to Create a Kitchen Remodeling Budget


While we'd all love to transform our drab and boring kitchens into the lavish spaces that adorn the pages of interior design magazines, there's only so much that we can afford to do. When planning for a kitchen remodel, it's best to thoroughly consider your current finances before finalizing your remodeling budget. Here are a few questions to consider when creating your budget:


How long will I be living in my home?

How much does my home cost?

How much do I owe?

How much am I willing to spend?


How long will I be living in my home?

There are different things to consider when remodeling with an intent to sell vs. remodeling for yourself. If you plan on selling your home in the next few years, then take care not to overspend. Consult with real estate agents regarding the average home prices in your area. Your investment into your kitchen should accurately reflect these values. You want to be able to profit off of your home sale, not lose money that you spent on remodeling the kitchen. If you plan on staying, your investment will be in the efficiency of use and comfort of your kitchen.


How much does my home cost?

It is recommended that you spend no more than 15% of the value of your home on a remodel. If you plan on selling your home, spend a bit less, maybe around 8-10%. If you've recently moved into your new home, consider any other financial burdens that may arise through construction on any other parts of the home before settling on a kitchen remodel budget.


How much do I owe?

Before embarking on such a costly endeavor, you must take into account all of your debts. Can you really afford to undergo this remodel? If you plan on using a loan to finance your remodel, you must have an idea of your debt-to-income ratio. This is the figure that lenders will use to determine your loan eligibility.


How much am I willing to spend?

After taking your income and expenses into account, come up with a final amount that you will be spending on your kitchen remodel. To ensure a stress-free remodel, do not compromise on this number. Understand that you will be dividing this number between your kitchen cabinets, countertops, plumbing, electricity, labor costs, etc. To figure out how best to allocate your funds, use our handy kitchen remodel cost estimator. Your budget should also include a 10% allocation for unforeseen expenses such as mold, termites, asbestos, or any other issues.





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