One of the most important parts of any home improvement project is deciding when and how to pay your contractor. While some people finance their remodeling project with a loan or credit card, others prefer to write their contractor a check.

If you're getting ready for a home improvement project, here are some suggestions from the Federal Trade Commission (FTC) on paying your contractor.

Contractor Payment Options

For most people, the size of the remodeling job dictates how the job will be paid for. For example, a large renovation project might require a home improvement loan or working with your contractor to arrange financing. For smaller jobs you may choose to write a check or pay by credit card. Either way, the FTC recommends that you avoid paying in cash. Here are more payment and financing tips:

• If you opt for contractor financing, make sure you get a fair interest rate and a reasonable payment schedule.
• Make the smallest down payment you can to your remodeling contractor. Many states limit how much a contractor can request for a down payment, so know the rules for your area.
• Base your payments around clearly defined amounts of work. By holding the purse-strings, you'll have greater "control" over the pace of your remodeling project and your contractor!
• Did you know that some states or local laws limit the amount that a final bill can exceed the estimate? Be sure you're familiar with the laws for your area.
• Never make a final payment or sign a release until you are completely satisfied with your remodeling project.
• Don't make a final payment until you know all subcontractors and suppliers have been paid. In some states they can file a mechanic's lien against your home to ensure that they get paid.
• Finally, according to the FTC, if you've used a credit card, and you have problem with your remodeling contractor which you've tried to resolve, you can withhold payment on the card, as well as any finance or related charges.

By following these payment tips, you'll be that much closer to your dream home and a hassle-free remodeling project.

Source

• Home Sweet Home Improvement, Federal Trade Commission

About the Author
AJ Fanter is a freelance writer based in Reno, NV.