Home Improvement Financing – Lien Wavers Overview and Facts

Whenever you hire a general contractor who will be using subcontractors to complete individual aspects of a remodeling project, it’s important to protect yourself from future inability by insisting that everyone sign a lien waver before any payments are made.

Avoid serious legal trouble following a major home renovation by making sure you have a lien waver signed by each and every sub-contractor hired to work on your home before the final payment is made. Even contractors who work for just a few hours need to sign a waver.

Few homeowners understand that even if the general contractor has been paid in full for all services (and a receipt signed), subcontractors can still place a lien on their property if they don’t receive payment from the general contractor who ultimately chose and hired them. Lien wavers take payment responsibility from the homeowner and put it back on the general contractor.

It’s considered normal practice for the main contractor to assume responsibility for hiring all subcontractors, and paying them from the fee the charges the homeowner. That’s why homeowners hire general contractors in the first place. Problems arise, however, if the general contractor fails to pay his subcontractors. Which, by the way, happens all of the time. Without a signed lien waver from each worker, the homeowner remains responsible for those payments, even if they’d already paid the general contractor for the services.

Lien wavers protect homeowners from double paying on a specific job by ensuring that all parties understand that the general contractor will be handling all subcontracting payments.

What is important for a lien waver to include?

The homeowner’s name.
The contractor’s full name, address and telephone number.
A detailed description of the work including the final state of the house at the completion of the job, as well as a listing of what materials should be removed from the premises.
The status of the work.
Signed and dated. Be sure to have the contractor print and sign his name on two copies (one for him and one for you). Date every one!
A witness signature (optional, but encouraged).

It may seem like a bit of a hassle to make sure lien wavers are signed by every single subcontractor who steps into your house during a large-scale project. But, not making sure that everyone releases you from further payment once the job is completed, is an easy way to safeguard you from further financial responsibility.

Home Improvement Financing Tips

Improving your home can be a good thing, but it can also put a hurting on your wallet. Most home improvement projects can cost a lot of money. Most people need to make some home improvements but really cannot afford it. So if you are thinking about making some major home improvements to the inside or outside of your home you should definitely think about the consequences before getting in over your head.

Home Equity Loans

Home equity loans are among the most popular for home improvements. It is a great way to borrow money. This is because the interest is deductible from your taxes. Also, most of the time the rates are lower with home equity loans than other types of loans. The great thing is that these loans can be quite easy to get for homeowners.

Home equity loans are great for home improvements because the improvements can raise the value of your home. It is kind of like borrowing money to invest in something. Additions to your home such as bathrooms or bedrooms can really increase the value of your home but can be expensive, therefore by borrowing the money to make these improvements you are borrowing money for an investment that will be of use in the long run, especially if you decide to sell your home.

A Word of Precaution

You should be very careful when getting a home equity loan. You have to remember that when you are getting this type of loan you are using you house as collateral. If you get to a point where you cannot make the payments on time you can end up losing your home. This is bad because when you borrowed the money you did so to make home improvements, so all the time and money you have now put into your home you will lose. Though this is a bad thing, the worse part is that you will loose the place that you live in. This can leave you high and dry with bad credit.

There are many people who use home equity loans for other things like vacations. This is not really a great idea, because they are left to rely on the current value of their home and if the value decreases over the years it could leave them without the money to pay off their loan. Therefore, it is best to use a home equity loan for improving the value of your home so there is never the chance that the value of the home would decrease below what you borrowed in the first place.

These are just a few things to keep in mind when thinking about getting a home equity loan. You do not want to be indebted because you wanted money for home improvements. Home improvement projects can greatly increase the house’s current value and be good investments for the long run. You should always go into a loan office with a keen mind to avoid making any bad decisions that could very well cost you your home.

Gaetane Ross is a Home Improvement Consultant who has spent over 4 years focusing helping people remodel and improve their homes. She also specializes in Holiday Home Decorating. Gaetane’s mission is to positively transform the lives of people by providing advice on Home Interior Design.