THINKING ABOUT HOME IMPROVEMENTS?

Do you want to make a few changes in your home? No matter what type of remodeling project you choose, make certain the improvements increase your home's resale value as well as provide comfort and convenience.

Don't assume that the money spent on sprucing up your home will automatically be recovered. To maximize your return, consider how long you are likely to live in your home.

If you plan to move within a year or two, it's wise to limit yourself to relatively inexpensive touch-up projects you can do yourself or have done for little cost. Cosmetic improvements will give your home a fresh, clean look, add to its market value and create a favorable impression that will make your home easier to sell.

On the other hand, if you are certain you will stay in your home for a minimum of three years, you might consider a more extensive renovation. However, don't "over-do it" -- spending more than you could possibly recover upon resale. The market value of your home is determined mainly by the value of the homes around it, regardless of renovations. Of course, if you plan to stay in your home forever, recouping your costs is not a factor. You can let your imagination and budget be your only limitations.

Once you have decided what you want to accomplish, think about financing. There are several options available. For instance, you might consider refinancing your current mortgage to cover the home improvement costs. This may be the most practical way to borrow for the long-term at market interest rates. If the outstanding balance is low on your current mortgage, refinancing could free up a considerable amount of cash. Another option is a second mortgage. The interest rate typically is higher on a second mortgage than the first mortgage and the term is shorter. For relatively minor home improvements (less than $10,000) you might consider an unsecured personal loan. The term generally is short and the interest rate is higher than on a secured loan. In addition, check to see if an installment payment plan is offered by the contractor.

When choosing a contractor, it's important to do your "homework,". Before interviewing potential contractors, decide what you want and why. Know what the renovation should look like and what problems you think it should solve. And, be firm about how much you can afford. By sticking to these rules, you can control both cost and design while minimizing the risks.

• Obtain at least three separate bids for all work needed and avoid firms that offer substantially lower prices than the others. You may find that the quality of the work is as low as their prices.
• Before signing a contract, obtain several references from the contractor, and check them carefully. In addition, contact the local office of the Better Business Bureau to check on the reputation and dependability of the company.
• Check to see if guarantees are offered. If so, find out if the guarantee covers all work, or is limited to certain materials.
• Obtain a written copy of the price quotations and the specific work to be done.
• Never pay a contractor in cash, particularly before the work is started.
• Obtain a certificate of the contractors' liability insurance coverage limits, policy and company.

Proper preparation is the key to smooth, successful home improvements. And, once completed, the project can add to the value and enjoyment of your home.