The bottom line for many homeowners looking to remodel is of course The Bottom Line - cash. How much the project will cost is one of the deciding factors for all of us. Of course the answer all depends on many factors from the kinds of material you use to the extent of improvements you have done. So let's compare a couple of kitchen remodel budget ideas. I talked to an Ohio kitchen remodeling expert about the costs associated with re-doing a kitchen, and here's what we came up with.
A big, totally custom kitchen could run you around $50,000 or more. This kind of project could involve new kitchen cabinets, custom-made. Kurt Karhoff with Holland Remodeling & Building in Northeast Ohio says he's done kitchen improvements that included $40,000 in custom cabinets, and that's just the material cost! A kitchen project of this price would also include things like:
- Moving or installing an oven or stove
- Replumbing a sink (moving an existing sink, adding a new one or putting in a new one)
- Install plumbing for a dishwasher
- Ceramic tile
- All new cabinets
- New counter tops (possibly granite)
- Install a new or replacement window
A more general, average remodeling budget may cost around $15,000-$25,000. This is the kind of kitchen remodel where you make a few improvements then "put stuff back where it was" instead of rearranging the entire kitchen. Let's say you want decent cabinets with laminate countertops. Materials could cost in the $6,000 range, then you add the labor.
This kitchen remodel budget would include work like:
- Re-painting cabinets
- Laminate counter tops
- Replace the refrigerator or oven/stove (but keep in the same spot)
- Lay down linoleum flooring
- New lighting fixtures
When you change the plumbing around, install gas lines to move a stove then you start to watch the dollar signs roll. When you keep things in the same places but simply make improvements, then your budget is a bit lower.
You can make a big difference with minor improvements, keeping the kitchen remodel budget fairly low. Kurt told me, "If the cabinets are good, you could dramatically improve your kitchen with nice counter tops. You could spend $5,000 on that and make your kitchen shine."
Flooring can make a huge difference too. For good ceramic tile, you're looking at around $15-$20 per square foot. For more average linoleum, you're likely in the $1-$5 per square foot range. Either way, changing the look of the floor and getting something new under your feet can make a huge difference.
When you have more than one project done, look out! "Combine a new floor with a counter top upgrade and you have a whole new kitchen," Kurt says.
That takes us to one of the financing options: FHA 203k. Instead of thinking in terms of total budget, think in terms of monthly payments. The 203k mortgage option allows homeowners to refinance and remodel, rolling the cost of the work directly into the mortgage payment.
For every $1,000 you finance, you'll pay about $6 more per month on your house payment. So that $25,000 kitchen costs about $150 more on your monthly mortgage payment. Because it's part of your mortgage, the interest paid is a tax deduction. Plus, it adds value to your home so when or if you decide to sell, those costs become part of your selling price.
With the 203k you have 2 options: 203k Streamline and the Full 203k. If you're staying under $35,000 and the work is not structural, then the 203k Streamline could work. However, if your budget exceeds $35,000 or if the work is considered by a home inspector to be structural, then you'll go with the Full 203k. Either option requires the same 3.5% down payment and specific loan criteria, but the Full 203k requires you to hire a 203k Consultant to help oversee the process. A 203k Consultant - licensed by HUD - may be a good idea even if you're going with a 203k Streamline.
Most FHA 203k Streamlines Kurt sees involve sprucing up counter tops. Once again we return to the idea that a few simple improvements can make a huge difference. Learn more about financing work like a kitchen remodel with "The Ultimate Guide to Home Improvement Loans" at the button below. The guide covers both 203k options, as well as home equity loans. It's up to you to decide how you want to pay for your remodeling desires.