If you plan on making home improvements this summer, you're not alone. The home renovation market has grown by more than 50% since 2009, and the overall market for home improvement and repairs in the U.S. is more than $400 billion annually, according to the Harvard Joint Center for Housing Studies.
This growth isn't surprising given the age of existing housing stock, the need for affordable homebuying options, the number of retirees opting to age in place, and the shortage of the U.S. housing supply.
To help address these challenges, Freddie Mac recently announced its CHOICERenovationSM mortgage, which offers more cost-effective options for financing or refinancing home renovations, repairs, or improvements. Further, CHOICERenovation is unique in that it allows borrowers to use proceeds to renovate or repair a property that has been damaged in a natural disaster or finance improvements to help prevent damage from a future disaster, such as building storm surge barriers, foundation retrofitting, or retaining walls.
This new offering, combined with low mortgage rates, is great news if your home needs renovations. If you're planning on using a renovation mortgage for your projects, it's important to work with a trusted lender to guide you through the process – whether you're a first-time homebuyer or a current homeowner looking to refinance.
Here are some additional tips for working with professionals to get your projects done:
- Talk to friends or check with your local homebuilders association for reliable contractors. Ask for references and check with the Better Business Bureau to see if complaints have been filed.
- Get estimates from multiple contractors.
- Make sure the contractor is licensed and registered with the state and has personal liability, worker's compensation, and property damage insurance. Ask for copies to ensure documents are current.
- Get a detailed written agreement on the work that will be completed. Before signing, be sure you understand and agree to the terms and how payments will be made.
- Don't pay in advance and never pay in cash. You may be asked to make progress payments but hold up to one-third of the contract amount until the work is completed to your satisfaction.
- Keep a written record detailing the progress of the work, payments made, approved changes, and other notes. Your records could help resolve confusion along the way.
To learn more about owning and maintaining your home, visit MyHome® by Freddie Mac.