If you’re ready to turn your basic or outdated house into the castle of your dreams, it’s high time to hire a home improvement contractor. Your house should be your happy place — a place where you can relax, spend time with family and friends, and do the things you love. You don’t want to hire just anyone to do such an important job. At HFS Financial, we know that finding the perfect contractor can feel overwhelming, so we have put together this guide to help you out.
Check Home Improvement Contractor References and Reviews
It might come naturally to you to check Google reviews before hiring a contractor, but don’t forget to check other review sites like Facebook and Yelp. You can also check to see if there have been any complaints lodged against the company. A quick Google search for the name of the company plus “lawsuit” can tell you if they have been involved in any legal conflicts.
If you want to know exactly what it’s like to work with a certain contractor, there’s no better way than talking to their former customers. You can ask if they have a list of references you can call. If you are part of a neighborhood Facebook page or community website, it would be a good idea to ask if any of your neighbors have used that business before and if they would recommend them to you.
Decide On the Scope of the Renovation Project
Before scheduling a meeting with potential contractors, you’ll want to make sure you’ve thought about the scope of the renovation project. Start by making a list of the changes you want to see happen to your home. Don’t forget to think about the details like the number of electrical outlets you will need or the type of wood flooring you want.
Make Sure the Home Improvement Contractor is Licensed, Insured, and Bonded
You may be excited if you have found the least expensive contractor in your area, but there is probably a reason why they are so cheap. Legitimate contractors pay extra money every year to be licensed, insured, and bonded, so that is part of their overhead costs.
Why a Home Improvement Contractor Should be Licensed
Being licensed means that the contractor answers to a state licensing board. Therefore, they are incentivized to follow building codes, pull permits, and produce quality work. If they don’t do those things, they could lose their license. An unlicensed contractor can basically do whatever they want, and you will have no one to complain to when they prove to be sub-par.
Why a Home Improvement Contractor Should be Insured
Being insured protects the contractor’s finances, as well as yours, in the event of an accident. Liability insurance will pay to fix damage to your property caused by the workers or equipment. Worker’s compensation insurance will pay for lost wages and medical bills of workers injured on your property. If they don’t carry insurance, you could be responsible to cover these costs yourself.
Why a Home Improvement Contractor Should be Bonded
Being bonded means you will be protected if the contractor cannot finish the job for some reason. In this case, a surety bond would step in and pay for another contractor to finish it. If your contractor isn’t bonded and they suddenly go out of business or can’t find enough employees, you would be stuck paying for another contractor yourself.
As you can see, there are many nightmarish scenarios that could happen to you if you opt for a cheap contractor over a legitimate one. And all you have to do is ask your contractor of choice whether or not they are licensed, insured, and bonded. They probably get asked this question a lot, so they will have no problem showing you proof.
Get the Right Documents from Your Home Improvement Contractor
You can’t “cross your t’s and dot your i’s” until you have all the proper paperwork from your contractor. Here are the main things you should look forward to getting as part of your contract.
- Scope of Work – A detailed description of what the contractor is responsible for completing.
- Cost Estimate – An itemized list of hard costs (labor and materials) and soft costs (things other than labor and materials) that the contractor expects for the entire project.
- Project Schedule – Depending on the size of the project, your contractor might break it down into phases and have a scheduled completion date for each phase.
- Renderings – You don’t want to agree to anything without seeing a blueprint or rendering of some kind. You need to make sure the contractor’s vision is the same as yours. This will also help them to catch mistakes in the design before getting started.
- Financial Paperwork – Details about how you are planning to pay for the project.
- Proof of License, Insurance, and Bonding – Handshakes and verbal promises aren’t enough in these circumstances. Get hard copies of proof and keep them with your contract.
Find the Perfect Financing for Your Project
There’s one more question you need to answer: How are you going to pay for this dream home improvement project? Home equity loans, cash-out refinancing, and government-backed loans involve refinancing your mortgage and rolling the home improvement loan into your new mortgage. These options are not ideal for the following reasons.
- They are complicated and take a long time to get approved.
- You’ll have to schedule a home appraisal and wait for an appraiser to come to your house.
- You’ll be starting over on your mortgage (you’ll be back to waiting 15 or 30 years for your house to be paid off).
- You’ll be putting your home on the line.
- The banks often do stage funding, which means they will only fund a small portion of the loan at a time.
- Stage funding may delay your project because the contractor will need a forthcoming payment before they can continue.
On the other hand, getting a personal home improvement loan through HFS Financial carries none of the downsides listed above. It’s fast and easy. You won’t need a home appraisal. We don’t do stage funding! Your project loan will be funded upfront.
All you need to do is take 60 seconds to fill out our application. One of our experts will be in touch with you quickly to go over your loan options. We have been helping homeowners find the best home improvement loans for decades, so you can trust we know what we’re doing. At HFS Financial, “You Dream It, We Finance It!”