Home $weet home ... or financial folly

There are tempting ways to use your home for potential financial gain. The line isn't always bright, but there are some guidelines for when such moves can be smart ... or dopey.

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Dopey home improvement move
When renovating makes little sense
The beauty of owning a home is that you can customize it to your desire. Of course, doing so takes time, money, vision, talent, and a good sense of value.

If any one of those things is missing your renovation may soon become the pricey project from hell.

Here's when the move can be dopey:

Taking a penny-wise, pound-foolish approach to renovating is like throwing money away. Here are red flags signaling you're headed in that direction:

  • You want the cheapest contractor. Unless he comes licensed and recommended, chances are you'll have to hire someone to come in and do the work again.
  • You opt to do-it-yourself despite having no experience in home repair or remodeling (and despite your spouse begging you not to). Get ready to pay someone to come in later and rescue you.
  • You pick the cheapest materials rather than those you love for things you use everyday or rather than materials that are sturdiest for things you permanently install. You won't enjoy the renovation once it's done and chances are neither will potential buyers of your home when you're ready to sell.

Prepay mortgage? Yup

Prepay mortgage? Nope

Tap equity? Yup

Tap equity? Nope

Renovate? Yup

Renovate? Nope

Get an ARM? Yup

Get an ARM? Nope
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