Why might you think of adding to your home? Well, suppose the kitchen is too small, and by adding on a new one you'd have the usable space, light, counter space, and added resale value about which you've always dreamt.

The reasons to add on to your home include the ones mentioned about home improvements, and then some. It's a more extreme step to take, and you're more likely to need pros (in fact, it's just about a sure thing that you're going to need professional help).

If you're thinking of an addition for the sake of resale value, put yourself on the other side of the proverbial fence: What is important to the home buyer? Here's a list of remodeling projects that buyers are likely to find valuable:

	Adding or remodeling a bath
	Improving the kitchen
	Adding a new room
	Landscaping

Besides adding to resale value, improving your enjoyment of the place, and updating, there's another potential reason for a house addition: Your family has grown and you need more space.

Whichever of the above spur you to add on rather than to move, here's a quick overview of some of the professionals you may need in remodeling your home.


Architect

These professionals design homes or additions from the foundation to the roof. If you're planning structural changes -- adding or taking out walls, for example -- or anticipating a complex design, you'll want an architect. You may pay an hourly fee or a flat fee. Be sure to get an estimate of the total cost: It can take 80 hours or more to draw up plans for a major remodeling project. And you sure as heck don't want that second-story balcony you did by hand with only a hammer and a hacksaw to collapse with a crash in the middle of the first snowstorm.

To find a certified architect in your area, write to: American Institute of Architects, 11735 New York Ave., NW, Washington, DC 20006. You can also find them online by clicking here.


Contractor

This person oversees the nuts-and-bolts aspects of your home improvement project, such as hiring and supervising workers, getting permits, making sure inspections are done as needed, and providing insurance for work crews. You may wish to get proposals from one or more reputable contractors, based on specific details of your project. Be sure each contractor bids on exactly the same plan for comparison purposes.

Once you've chosen a contractor, make sure your contract specifies that you will pay in several stages. It's customary to pay one-third when the contract is signed so that the contractor can buy supplies. The number and timing of other payments depends on the size of the job, but do not make final payment until all work is successfully completed, inspected, and approved. Call the National Association of the Remodeling Industry (NARI) Homeowner Hotline at 1-800-440-NARI for a free copy of the brochure "Select a Professional Remodeling Contractor" and a list of NARI remodeler members in your area.


Interior Designers

These specialists offer advice on furnishings, wall coverings, colors, styles, and more. They can help save you time (by narrowing down selections) and money (from the professional discounts they might receive). When meeting with an interior designer, be sure to talk about your personal style and preferences. Expect to pay anywhere from $50 to $150 per hour, or you may negotiate a flat fee of perhaps 25% of the total project cost. For a referral to local interior designers, phone the American Society of Interior Design at 1-800-775-ASID. Depending on the scope of your home improvement plans, finding funding may be a project itself. If the project is small, you may be able to save for it from your regular household budget. For larger projects, you'll probably need to borrow money.


Borrowing Money for Improvements

If you participate in a 401(k) or 403(b) plan at work, you may be able to get a short-term loan from your account. To find out if this option is available to you and to learn about any tax implications, talk to your benefits administrator. Be sure to take a look at our 401(k) area online as well.

Another possibility is borrowing against the cash value of your life insurance policy. If you're interested in finding out more about this type of loan, you can begin by using our insurance area as your first educational stop. And along the way you'll learn about what insurance is -- and what it isn't.

To take out other types of home improvement loans, head to your local bank, savings and loan, or credit union. Compare interest rates, repayment options, and penalties from lending institutions before deciding on one of the following options:

Second mortgage. This is a loan against the equity in your home. It is, in essence, an additional mortgage. Typically, financial institutions will let you borrow up to 80% of the appraised value of your home, minus the balance on your original mortgage. For example, if your home is appraised at $100,000 and your current mortgage balance is $70,000, you may be able to borrow $10,000 by way of a second mortgage. You may also incur all the fees normally associated with a mortgage -- closing costs, title insurance, and processing fees. Talk to your tax advisor about whether the interest on a second mortgage is tax-deductible.

Unsecured Loan. Although the interest rates charged are often higher and you generally will not be able to get a tax deduction for the interest paid, the costs of obtaining an unsecured loan are usually lower. The relative ease of obtaining this type of loan makes it popular for small projects costing $10,000 or less. The lender will evaluate your application based on credit history and income.

For more information on sources of financing, see our collection in Refinance and Home Equity.

But before we go there, let's stay for a moment with the practicalities of getting the work done. How does one go about finding a contractor?