Home Improvement – Should You Be Your Own General Contractor?

For those planning a home improvement project for which keeping the budget modest is a major factor, the question often arises, “Should I be my own general contractor?” Let’s take a look at the pros and cons.

First let’s look at what a general contractor is and does.

In a nutshell, a general contractor, or GC, is the person responsible for the overall, successful completion of the project. On a small home improvement project that could mean doing the actual construction work as well as managing the details such as permits and staying on budget.

For a larger project such as a room addition, a major structural remodel or building an entire house, it falls to the GC to hire, manage and pay the sub-contractors (the workers who will be building the moulds, pouring the concrete, doing the framing, etc.) as well as making sure the job gets done on budget, on time and accurately.

If you are thinking of being the general contractor for a large project, having at least an intermediate level of knowledge of the construction process, including pulling permits, local construction codes, contracts and proper insurance is very important.

Also, you need adequate time to supervise the goings on at your site. I don’t know many people with the free time away from a job to successfully manage this type of large undertaking. If you are short on knowledge and/or time, but are still thinking of acting as GC on your major home improvement project, I wish you good luck. This is not to say you can’t do it, but the headaches might not be worth the trade off.

Let’s not forget that the main reason to act as your own GC is potential cost savings. Since professional GCs generally mark up every piece of material and every sub-contractor salary, sometimes by as much as 30% or more, if you can save some of that money by acting as your own GC, by all means do it.

But if you are not familiar with the details of completing your project, those potential cost savings can turn into cost overruns in a hurry. With a smaller home improvement project, however, the stakes are not as high and so the potential benefit is there without the same degree of risk.

But even with a smaller home improvement project, there are qualities a GC should have that are important.

Unless you’ll be doing all of the demolition, sawing, nailing and finishing yourself, as GC, you’ll be hiring, managing and paying the sub-contractors. People skills, knowledge of finances and a healthy dose of common, good sense are necessary.

If you’ve never done a home improvement project similar to the one you will be taking on, a willingness to ask questions – even ones you think are just plain dumb – is vital. Also, having a “can do” problem-solving attitude is recommended. After all, you’ll be the one everyone looks to when a fix, change or solution is needed.

The main argument against being GC on your own job is a big one. If you don’t like the finished job, you have no one to point the finger at (or fix what you are unsatisfied with) but yourself.

The value of a good GC is his or her experience and ability to solve problems. While there will certainly be extra cost involved in your job by hiring a general contractor, in the end the peace of mind might be worth the expense.

Home Equity Loans Can Be a Life Savior in Bad Credit

If a person owns a house to his name, home equity loans can provide the option of borrowing large sums of money at a lower rate of interest. The only risk factor involved is that the house has to be kept as collateral against the loan. Therefore, a borrower must be completely sure that such a loan is really required and cannot be postponed.

What Exactly Are Home Equity Loans?

In simple terms, home equity is the current value of on a house minus debt or mortgage on it. In such loans, the house is placed as collateral with the lending company, usually a bank, and if the borrower fails to repay the loan as per the stipulated terms in the contract, the lender has the option to seize the property and auction it to recover his money. Such secured loans can also be used in times of bad credit, such as poor credit Loans.

Advantages And Disadvantages Of Home Equity Loans

The main disadvantage, or perhaps the “only” disadvantage, of such loans is that a person can lose his home if he fails to make the repayments on time. So, a person with impulsive spending habits should avoid taking such a loan. However, such loans provide several benefits for a sensible spender.

* Home loans mortgage rates are considerably lower than other sundry credit rates, as this is a secured form of loan.

* There is no restriction on the use of this loan money. One can use it to pay off any existing college loans or student loans, or even consolidate all their existing debts into one lump sum loan account, at a considerably lower rate of interest than before, with only one payment to keep track of, every month. One can also use this money for home improvements, or to pay off sudden medical expenses in the family.

* Bad credit home loans are available to people that have low credit scores. Normally, debt management is the toughest for such people, because their existing loans are usually at higher rates than for general public, which leads to frequent cases of defaults and arrears, resulting in even lower credit rates. Home equity loans provide such people a chance to become debt free over time and improve their credit scores too.

Applying For Such Loans

Different states have different rules for home equity. For example, a person residing in Texas should go for Texas mortgage loans only. Second, although the application process for home equity loans is easy and less intensive as compared to primary mortgage procedure, it nevertheless, involves the assessment of one’s credit reports, income and expenditure, and the property’s Loan To Value (LTV) Ratio. Usually, the bank recruits professionals conduct this appraisal. Once the application is accepted, all costs associated with it, including attorney fees, title costs, and application costs, have to borne by the borrower. The monthly repayments include interest on the loan.

Home equity loans, although useful, come with risk factors. Therefore, careful consideration must be given to all details, before one applies for such a loan.