Insurance & Maintenance

Protect your biggest investment with the right insurance and regular upkeep.

What is guaranteed replacement cost insurance?

Guaranteed replacement cost insurance is the most comprehensive homeowners insurance policy available. It covers the full cost of rebuilding your home — even if that cost exceeds your policy’s stated limit. However, this coverage isn’t always available for every property. For example, some older homes may not qualify. Even when it is available, some insurers cap their payout at 120% of the policy’s face value.
Expect to pay anywhere from $400 to $1,000+ per year depending on the home’s value and location.

What kind of home insurance should I have?

A standard homeowners policy typically covers damage from fire, wind, theft, and other common hazards, and it protects your belongings too. However, it usually won’t cover floods, earthquakes, war, or nuclear incidents. You can add extra coverage for these events.
If you live in a flood zone or earthquake-prone area, your mortgage lender may require this additional insurance before approving your loan.

Maintenance

A well-maintained home holds its value — and prevents expensive problems down the road.

How much, on average, can I expect to spend on maintenance?

As a general rule, expect to spend about 1% of your home’s purchase price annually on maintenance. That includes everything from painting and tree trimming to gutter repairs, caulking, and system upkeep.
Older homes usually require more maintenance, depending on how well they’ve been cared for over the years.
Think of maintenance as mandatory. Poor upkeep can lead to decreased home value and costly repairs later. A clogged gutter might cost a few hundred dollars to fix, but the water damage it causes could cost thousands.

Is it true you never really stop fixing up a home?

Yes. From the day you move in to the day you sell, there will always be something to fix, upgrade, or improve.
Some projects may be purely for comfort or aesthetics — like upgrading to central air or adding decorative windows — while others will be essential, like replacing a leaking roof or fixing plumbing issues.
Even if you’re not planning to sell anytime soon, regular maintenance helps preserve your home’s value and makes it easier to sell when the time comes.

Is there anything I should pay special attention to?

Yes. Do a full inventory of your home at least once per year. Check the roof, plumbing, electrical systems, foundation, and major appliances. The sooner you catch an issue, the cheaper and easier it is to fix.
A proactive approach can prevent small problems from turning into major expenses.

What about the unseen problems like toxic gases?

Combustion appliances (like gas water heaters or furnaces) can leak dangerous gases like carbon monoxide or sulfur dioxide into your home if they aren’t properly vented or maintained.
To avoid this, hire a professional — ideally someone trained in HVAC, ducting, and indoor air quality — to inspect and maintain your systems annually. This includes checking for heat exchanger cracks, vent blockages, or chimney issues.
Routine maintenance can help prevent combustion spillage and keep your home safe.

Other Improvements

From repairs to remodels, get the most out of your home with smart upgrades, financing strategies, and legal awareness.

Can I avoid major home improvements down the line?

Yes — by taking proactive steps now. Make it a habit to perform an annual inspection of your entire home, including the roof, foundation, electrical, plumbing, and HVAC systems. Catching and fixing small problems early helps you avoid larger, more expensive issues in the future.

Are any home improvements tax deductible?

Yes, but typically only after you sell your home. Improvements that increase your home’s value — such as a new roof, upgraded wiring, or an added bathroom — can be added to your home’s cost basis, potentially reducing capital gains taxes when you sell.
In some years, the government has also offered limited-time tax credits for energy-efficient improvements. Check with the IRS or a tax advisor for the most current information.

Do I need building permits for home improvements?

In most cases, yes. Building permits are usually required for structural work, electrical and plumbing changes, or any alterations that affect your home’s living space.
Permits ensure your project meets local safety codes. Depending on your contract, either you or your contractor will be responsible for obtaining them. Always clarify this upfront to avoid legal or financial trouble later.

Does the government offer home improvement assistance?

Yes. Several federal programs exist to help homeowners finance improvements:

• Title 1 Home Improvement Loan (HUD): Insures loans up to $25,000 for repairs and upgrades.
• Section 203(k) Program (HUD): Combines the cost of home purchase and renovation into a single loan.
• VA Loans: Available for veterans to buy, build, or improve a home.
• Rural Housing Repair Loans (USDA): Offers low-rate loans to rural homeowners to make repairs or remove safety hazards.
  State and local governments may also have renovation assistance programs — contact your mayor or governor’s office for details.

How can I finance a remodeling project?

There are several financing options depending on your situation:

• Refinancing: Take out a new mortgage at a lower interest rate and borrow against your home’s equity.
• Second mortgage or home equity loan: Borrow a lump sum based on your home’s value.
• Home equity line of credit (HELOC): Draw funds as needed with variable interest rates.
• Unsecured loan: Easier to get, but higher interest rates.
• Other options: Margin loans, loans from retirement accounts, life insurance, or even credit cards (not recommended unless short-term and low-interest).

How do I make energy-efficient improvements?

Start with the basics:

• Seal gaps around windows and doors. A 1/8″ gap under a door is like leaving a 2″ hole in your wall.
• Insulate water heaters and pipes.
• Lower the thermostat on your water heater.
• Replace furnace filters regularly.
• Install low-flow showerheads and faucets.
  These small upgrades can reduce utility bills and ease the load on your HVAC system — and they’re often eligible for rebates or tax incentives.

What if my home is damaged in a natural disaster?

You may qualify for a low-interest disaster loan from the Small Business Administration (SBA). These loans can cover uninsured damage from natural disasters, fires, or civil disturbances.
Homeowners may borrow up to $200,000 for repairs and up to $40,000 for personal property replacement. Apply after registering with FEMA and receiving a Registration ID number.

My budget is tight. Are there affordable ways to add space?

Yes — try space reconfiguration.
Rather than building new additions, look for underutilized spaces you can convert:

• Turn your attic into an office.
• Finish a basement.
• Convert a large closet or part of a garage.
• Section off part of an oversized room to create a powder room or small bedroom.
  These updates are typically far cheaper than full-scale renovations.

Are home improvement allowances a good idea?

Contractors often use allowances for materials like flooring, cabinets, and fixtures. These are placeholder budgets for selections to be made later.
Allowances give you flexibility, but they can lead to extra charges if you choose materials that exceed the allocated amount.
Shop around before signing a contract to make sure the allowance is realistic — and always clarify who’s responsible for overages.

What legal considerations should I keep in mind?

Remodeling often involves a web of zoning laws, permits, variances, and building codes. These rules vary by location and govern everything from structural changes to drainage systems.
Contractual issues also matter:

• Who secures permits?
• Who ensures code compliance?
• Are warranties or insurance provided?
  If you’re working with a lender, you may also need progress inspections, lien waivers, and special financing terms.
  For complex projects, consider hiring a lawyer to review your remodeling contract and protect your interests.

What projects have the best return on investment (ROI)?

Some projects deliver more value than others. According to recent studies:

• Vinyl siding replacement: 87.2% ROI
• Wood window replacement: 85.3% ROI
• Minor kitchen remodel: 85.2% ROI
• Bathroom remodel: 84.9% ROI
• Vinyl window replacement: 83.7% ROI
  In general, improvements that bring your home up to the standard of others in your neighborhood provide the best return.

Remodeling Considerations

Smart planning. Safer homes. Better outcomes. Here’s what every homeowner should know before, during, and after a remodel.

How can I reduce chaos, stress, and safety risks during a remodeling project?

Planning is everything.
Before work begins, talk openly with your contractor about timelines, jobsite logistics, safety protocols, and day-to-day disruptions. Discuss:

• Where tools and materials will be stored
• How to protect furniture and belongings from dust
• Which parts of your home will be off-limits
• Temporary workarounds if a kitchen or bathroom is unavailable

Set house rules around things like:

• Music or radio volume
• Bathroom access
• Smoking or profanity on-site

Lastly, designate a quiet, clean area in your home to escape the noise and mess. A little planning upfront will go a long way in preserving your sanity.

What is a variance?

A variance is an official exemption from local zoning rules.
It’s typically granted when strict enforcement of the rules would cause unusual hardship — such as on an oddly-shaped lot. For example, a variance might allow a smaller setback so you can build a garage or a gazebo that wouldn’t otherwise be allowed.

What is Universal Design?

Universal Design is about creating spaces that work for everyone — regardless of age, ability, or circumstance.
This design approach is especially important in remodeling, allowing you to:

• Expand doorways
• Lower countertops
• Add no-step entries or curbless showers
• Install lever-style door handles

Universal features not only enhance accessibility but can increase your home’s resale value and usability over time. HUD offers detailed resources on implementing these features in remodeling projects.

What should older homeowners consider before remodeling?

If you’re planning to age in place, the home may need modifications to remain safe and accessible. Consider working with a Certified Aging-in-Place Specialist (CAPS) to assess your needs and options.
Common upgrades include:

• Installing a bathroom and bedroom on the main level
• Adding grab bars or walk-in tubs
• Replacing stairs with ramps or lifts

The CAPS program, developed by the NAHB and AARP, trains remodelers to meet the evolving needs of aging homeowners.

What are some cost-saving tips for kitchen remodeling?

You don’t need to gut your kitchen to make it functional and modern. Try these cost-saving ideas:

• Keep existing appliances if they still work
• Maintain the current layout to avoid costly plumbing/electrical work
• Reface cabinets instead of replacing them
• Skip soffits and fancy trim to reduce labor costs
• Use neutral colors for better resale appeal
• Check for hardwood flooring under vinyl — refinishing it may be cheaper than new floors

By being strategic, you can refresh your kitchen without overspending.

What about remodeling the bathroom on a budget?

Bathroom upgrades can quickly add up — but smart decisions can save thousands.

• Reglaze a good-condition tub instead of replacing it
• Use cultured marble or fiberglass instead of tile
• Install a pedestal sink to save space
• Choose a tub/shower combo if space is tight
• Add a dedicated water heater if installing a large jetted tub

Every detail counts — especially in small, high-traffic spaces like bathrooms.

What should I know about mechanics’ liens?

A mechanic’s lien is a legal claim against your home if contractors or suppliers aren’t paid.
Even if you’ve paid your contractor, you could still be liable if subcontractors or suppliers don’t receive payment. To avoid trouble:

• Choose reputable contractors
• Insist on lien waivers with each payment
• Include payment responsibilities in your contract
  If your project involves a lender, their process will often require lien releases and draw schedules.

What zoning issues should I be aware of?

Zoning laws determine what you can build, how tall, and where.
They protect neighborhoods from incompatible land use — but they can also limit your remodeling options. Always check local zoning rules before you build or modify:

• Room additions
• Detached structures
• Fences
• Home businesses

Contact your local zoning office or city hall to review ordinances and permitting requirements. Don’t assume your project is allowed — many communities require approval even for minor changes.

Refinancing

Lower your payments, access equity, and plan for the future. Here’s what every homeowner should know about refinancing.

Can older homeowners tap into their home equity?

Yes — but traditional refinancing isn’t always the best option.
For homeowners aged 62 or older, a reverse mortgage may be a smarter way to convert home equity into usable cash. Unlike a traditional mortgage, the lender makes monthly payments to the homeowner — not the other way around. This money can be used for:

• Home repairs and upgrades
• Medical expenses
• Everyday living costs

Reverse mortgages are tax-free and do not affect Social Security or Medicare, although they may impact eligibility for some government assistance programs like Medicaid.
To qualify, the homeowner must:

• Be at least 62 years old
• Own the home (even if there’s still a small balance owed)

Repayment isn’t due until the home is sold, the homeowner moves out, or passes away — at which point the estate repays the loan and accrued interest.

Can I refinance a home loan more than once?

Absolutely.
Many homeowners refinance multiple times — especially when interest rates drop. Each refinance replaces your old loan with a new one and may help you:

• Lower your monthly payment
• Pay off your loan faster
• Switch from an adjustable to a fixed-rate mortgage

However, every refinance is essentially a new mortgage — meaning:

• You’ll go through a full application process
• Your home may need to be re-appraised
• You may pay new closing costs and possibly prepayment penalties from your original loan

Be sure to calculate whether the long-term savings outweigh the upfront costs before refinancing again.

When is the best time to refinance?

The best time to refinance is when mortgage interest rates are at least 2% lower than your current rate. But timing also depends on:

• How long you plan to stay in your home
• How far along you are in your current mortgage
• Whether you’ll be paying high refinancing fees

Refinancing can make sense if you expect to stay in your home for at least five more years — long enough to recoup any costs and benefit from a lower monthly payment.
Some lenders even offer no-cost refinancing, rolling the fees into your new loan.
Always compare offers from your current lender and competitors to ensure you’re getting the best deal.

Renovating and Adding Value

Smart upgrades can increase comfort, functionality, and resale value — if done wisely.

Are there ways to save money when adding new space to my home?

Yes — building upward is typically less expensive than building outward.
Adding a new wing or ground-level addition usually means pouring a new foundation, which drives up costs. By building up, you can often tie into your home’s existing plumbing, electrical, and mechanical systems more efficiently — saving money and materials.

Is there such a thing as “over-improving”?

Absolutely.
Making improvements that far exceed the value of surrounding homes can backfire when it comes time to sell. For example, putting $200,000 of upgrades into a home surrounded by $150,000 properties may not yield a return.
Before taking on major renovations, consider whether your neighborhood can support the higher property value — or if you’re better off keeping things modest.

What are the main reasons why homeowners remodel?

According to the National Association of Home Builders, the top reasons homeowners remodel include:

• Gaining more living space
• Avoiding the cost of moving
• Improving comfort and amenities
• Adapting to lifestyle changes (like remote work or growing families)

Remodeling also enhances your home’s value and long-term livability.

What kind of return can I expect from home improvements?

It depends on the project.
According to Remodeling magazine’s annual “Cost vs. Value Report,” the highest returns typically come from:

• Siding or window replacements
• Minor kitchen remodels
• Bathroom updates
• Family room and master bedroom additions

Generally, improvements that boost curb appeal or modernize kitchens and baths deliver the best ROI.

What should I consider once I decide to add on?

Before starting any addition, ask yourself:

• How will I finance it? Will I pay cash or take out a loan?
• Do I have enough equity in the home to qualify for financing?
• Is expansion feasible based on your current layout and property lines?
• What do local zoning or building codes allow?
• Will I hire a contractor or do it myself?

Careful planning upfront will help you avoid headaches later.

What should I weigh before considering an addition to my home?

Look at how you’re currently using your space.
You may not need to build at all if you can convert underused areas like:

• A garage
• An attic
• A side porch
• A basement

Even carving out space from a large living room or kitchen can allow for a small powder room or office. These reconfigurations cost far less than full additions.

When should I tackle the job myself or call in the pros?

Ask yourself a few key questions:

• Do I have the skills, tools, and time?
• Can I get reliable help from friends or family?
• Am I confident I can follow local permit and code regulations?

You can potentially save up to 20% of project costs with DIY work.
That said, mistakes can be costly — both in terms of budget and home resale value.
If you’re not experienced, experts recommend sticking to:

• Painting
• Minor landscaping
• Building interior shelves
• Light cosmetic upgrades

Leave larger projects, like structural changes or electrical work, to licensed professionals.

Second Homes & Taxing Matters

Considering a vacation home or curious about tax implications? Here’s what to know before making a move.

Should I buy a vacation home?

Buying a second home can be a smart move — for investment, recreation, or future retirement — but it’s not a decision to take lightly.
The second-home market is more volatile than the primary-home market, with demand often dipping in a bad economy (except in luxury sectors). However, buying now with plans to eventually retire there can be a strategic advantage.

Before you commit, ask yourself:

• Can I afford two mortgages?
• Am I able to maintain two properties and pay extra utilities and upkeep?
• What are the financing requirements for second homes in my state?
• Will this be a source of income, or just for personal use?

What about a vacation home as an investment?

A vacation home can generate rental income and appreciate in value — but like any investment, there are risks.

Consider:

• Can you afford repairs, maintenance, insurance, and utilities year-round?
• Will you hire a property manager or cleaning crew between guest stays?
• Can you cover the mortgage if you can’t find renters for a season?
• Are you aware of property management fees or agent commissions if you rent it out?

Also, keep in mind that remote ownership means being prepared to handle emergencies and upkeep from afar.

Taxing Matters

From disaster relief to property tax appeals, here’s how to stay informed and save money.

Are special tax breaks available for historic rehabilitation?

Yes — if the property qualifies.
You may be eligible for a 20% investment tax credit on qualified rehabilitation expenses for certified historic income-producing properties. To qualify, the building must be:

• Listed in the National Register of Historic Places, or
• Located in a government-certified historic district.

Note: Demolition or major alteration of a historic structure is not eligible for tax breaks.
For more details, visit www.nationaltrust.org or call the National Trust for Historic Preservation at (202) 588-6000.

Many states also offer tax reductions and abatement programs for owners of residential historic homes. State-specific info is also available through the National Trust website.

Are victims whose homes are damaged by natural disasters granted any tax relief?

Yes.
If your home is damaged by a federally declared disaster (like a wildfire, flood, or hurricane), you can deduct your losses on your state and federal income taxes.

In fact, you can even amend the previous year’s tax return to claim your loss sooner and receive your refund faster — a huge help when trying to cover emergency expenses or start repairs.

Can I contest my property taxes?

Yes, and many homeowners do.
Property taxes are based on assessed home value — but assessors aren’t always accurate, especially in volatile markets. You can typically contest your property tax bill within a certain time frame after assessments are released.

You’ll need to prove your home is worth less than the assessor claims. Two common methods:

• A professional appraisal, using recent comparable sales
• A comparative market analysis (CMA), offered for free by most real estate agents hoping to earn your business

Contact your local tax assessor’s office for specific instructions on how to appeal.

Can I deduct improvements made to my home?

Yes — but not right away.
You’ll see the benefit after you sell your home. Improvements add to your home’s basis, or adjusted value, which reduces the taxable profit when you sell.

Here’s how it works:

• Selling price – closing costs – basis = your gain
• Basis = original purchase price + improvements – any depreciation

According to the IRS, eligible improvements must add value, extend the home’s life, or adapt it to a new use. Examples include:

• Upgrading plumbing or electrical
• Finishing a basement
• Adding another bathroom

Repairs and maintenance (like painting or fixing a leak) don’t count unless they’re part of a larger improvement project.