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Whether you’re looking to spruce up your barbecue area or design a fully equipped kitchen, there are plenty of options and logistics when it comes to building an outdoor kitchen.

This guide will go through the steps of siting, designing, and creating an outdoor kitchen, along with some typical costs and considerations for making your home improvement dreams a reality.

Settling on a Location

Before diving into the details of outdoor kitchen designs, settling on a location can help focus your planning and creativity. For starters, you can take stock of existing structures in the yard that could be incorporated into the design, such as patios and decks.

When envisioning options, measure the square footage of potential kitchen areas. This can inform what types of equipment and accessories will fit in the space you have.

Having some essential design features in mind, such as a grill or wood-fired pizza oven, could help guide the siting process, too. If you have your eyes on heavier equipment, like furniture or a bar, you may need to reinforce a deck or patio to safely accommodate the extra weight. Consulting with a professional contractor is advisable to prevent sagging in the floorboards or more severe damage that could lead to a complete backyard remodel.

Slope and distance from the house could also impact the feasibility and cost. Building on an inclined surface might require a more robust foundation than a level area. Situating an outdoor kitchen a greater distance from the home may add the expense of connecting electricity or plumbing, not to mention the practicality of walking back and forth. Adding outlets can cost between $150 and $300 each, while new wiring costs $7 to $10 per foot, excluding the cost of labor for installation.

If possible, use existing structures or buildings next to the house to reduce such costs, and integrate an outdoor kitchen with the rest of the living space.

If you need help paying for your backyard sanctuary, a personal loan may be one option to consider. Personal loans are repaid with monthly payments of principal plus interest. Generally, there is some discretion on how the borrower spends the money, whether on an outdoor kitchen or paying off credit card debt.

Recommended: What Are the Most Common Home Repair Costs?

Creating an Outdoor Kitchen Design

After hashing out where to build, it’s time to delve into the details of the outdoor kitchen design. While browsing through dream kitchens on HGTV can provide inspiration and creative ideas, being realistic with your budget and desired kitchen features can keep you on track.

To avoid the impulse of keeping up with the Joneses, it may be beneficial to make a ranked list of possible equipment and design components alongside a budget.

Keeping in mind your own cooking habits and diet can be a useful litmus test to determine what you may use frequently and what could likely accumulate dust. It’s also worth considering how many people you’d like to accommodate.

If you’re overwhelmed with ideas but don’t know where to begin, finding a focal point to design around is one option to consider. For instance, barbecue connoisseurs may want to orient the outdoor kitchen design around the grill, whereas skilled mixologists might prefer to showcase their craft behind a central bar area.

Here are some further ideas for accessories and appliances to outfit an outdoor kitchen.

Grill

A built-in grill can look sharp and tailored within an outdoor kitchen design, but it can’t be wheeled away for additional entertainment space when you’re not cooking. Opting for a freestanding grill could help stretch your budget further and add some flexibility to an outdoor kitchen design.

Kitchen Island

Adding a kitchen island for a mixed-use of counter space and seating can further integrate the cooking and dining space to bring everyone together at a dinner party or family gathering. Opting for the roll-away variety can help you customize an outdoor kitchen depending on the occasion.

Sink

Including a sink in an outdoor kitchen is useful for cooking, easy clean up, and sanitation. The practicality of installing a sink and plumbing also depends on how far the outdoor kitchen is from the house. Carrying dirty dishes and pans a short distance for washing inside may not be worth the added cost of plumbing for some people.

Refrigerator

Whether storing food or drinks, a fridge can keep an outdoor kitchen stocked and ready and cut down on trips between the house. This requires running electricity for ongoing operation. For a full-size fridge, you can expect the cost to average between $1,000 and $2,000.

Countertops

As the cook in any family can attest, counter space is a big help when it comes to staging and preparing food. On top of stains and wear and tear over time, outdoor kitchen countertops may need to be weather resistant, too.

Marble is a popular interior countertop surface, but its cost and vulnerability to staining and wear mean it’s not the most durable. Some more hardy choices include slate and granite. Tile is a cheaper sturdy alternative, but typically requires more maintenance to clean the grout and replace cracked pieces.

For a functional amount of space, consider having at least 18 inches on each side of a sink, as well as 18-24 inches on either side of a grill.

Cabinets

To house all your outdoor kitchen utensils, pots, and pans in one place, cabinets are a good bet. Similar to the countertops, durability is a key factor to consider alongside cost. Using a marine-grade paint or stain on wood cabinets can improve their weather resistance and tie in the outdoor kitchen design with the house.

Lighting

Unless the outdoor kitchen will be built on an existing porch or patio, adding lighting may be a necessary investment to make a backyard dinner party possible. As mentioned, extending electrical wiring and adding outlets comes with costs. Given that 15% of home energy expenditures go towards lighting, going with solar lights could save on both the electric bill and wiring.

Landscaping

After construction is completed, landscaping can further beautify the outdoor kitchen space and provide privacy and shade in the way of bushes or trees. Landscaping costs can be as little as $500 to $700 for smaller jobs, though this is an easier opportunity than say plumbing or electric to recoup some money as a DIY project.

Recommended: 20 Beautiful Small-Kitchen Remodel Ideas

Choosing a Shelter

Even in the fairest of climates, having some protection from the sun and assurance you won’t be caught in the rain can be an asset to an outdoor kitchen design. In addition to making a more comfortable space, a shelter could also increase the lifespan of your outdoor kitchen equipment and furniture.

Check out some possible options that can protect and enhance an outdoor kitchen design.

Awning

Awnings are an option for shading an outdoor kitchen area. Based on size and materials used, a built-in awning costs between $1,409 and $4,350 on average.

Canvas awnings are not the most durable choice for areas that can have harsh weather conditions, but they can be removed and stored during winter and inclement weather to extend their lifespan. Metal awnings are another option, and are generally cheaper and sturdier. Upgrading to a mechanically retractable awning will likely increase cost, but can be handy in locations where weather changes quickly and frequently.

Gazebo

A framed gazebo can protect furniture and kitchen equipment while creating a comfortable space for cooking and dining. Whereas awnings are often attached to a structure or need to be taken down seasonally, gazebos can offer longevity and more options for placement.

Pergola

Composed of vertical posts and overhead cross-beams with open lattice, pergolas can add some architectural appeal to an outdoor kitchen area. The structure is well-suited for growing vines to increase shade while allowing for ample breeze.

The Takeaway

After figuring out the location, dimensions, and trimmings for your outdoor kitchen design, you can begin itemizing building or remodeling costs within a budget. If you come to realize you’re biting off more than you can chew, it’s okay to do the project in pieces. After all, cooking in your outdoor kitchen could be quite a bit cheaper than ordering from a restaurant, thus helping pad your savings further. There are also options to finance an outdoor kitchen project, such as personal loans.

If you’re ready to roll up your sleeves and get some home repairs or renovations done, see what a SoFi personal loan can offer. With a SoFi Home Improvement Loan, you can borrow between $5k to $100K as an unsecured personal loan, meaning you don’t use your home as collateral and no appraisal is required. Our rates are competitive, and the whole process is easy and speedy.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SOPL0623043

Thinking about installing a new deck, replacing a front door, or even adding an extra bedroom to your home to help increase its resale value? Considering that your home is one of the biggest investments you’re likely to ever make, it makes sense that you’d be interested in increasing its value with some upgrades.

But as you probably guessed, not all remodeling projects provide the same return on investment (ROI).

Using Remodeling Magazine’s Cost vs. Value 2023 report, which compares the average cost of 23 remodeling projects in 150 housing markets, let’s look at some of the most popular home improvements based on estimated ROI, time commitment, and cost.

Things to Consider Before Starting a Home Improvement Project

It’s important to note that national averages only tell part of the story. Labor and supply costs, styles, and consumer preferences can vary by location. So before you dive into a project, you might want to consider hiring a contractor, real estate agent, or an appraiser to come to your house and give an opinion on which upgrades might provide the most value based on where you live.

You may also want to factor in any immediate needs that a remodeling project might help satisfy. Let’s say, for instance, you’d like to add an extra bathroom. While you may only recoup part of your expenses, having an additional washroom may be worth the cost of a renovation.

Top Home Improvement Projects to Help Increase Your Home Value

Looking to prioritize your wish list? These remodeling projects earned top spots on the Cost vs. Value report.

HVAC Conversion/Electrification

Average Cost: $17,747

Resale Value: $18,366

Costs Recouped: 103.5%

General Time Commitment: Anywhere from 1-2 days up to several days, depending on whether your home requires structural changes

Replacing a fossil fuel-burning HVAC system with one that runs on electricity isn’t cheap. Nor is it one to try to DIY. But according to the Cost vs. Value report, you could stand to get back what you put in — and maybe even a little extra. Homeowners who decide to make the conversion may also notice a savings in their heating and cooling bills. And there are environmental benefits to consider as well.

Unless you’re a licensed HVAC technician, this is a project best suited for the professionals. Consider speaking with a few different HVAC installation teams to compare potential systems and cost options.

Garage Door Replacement

Average Cost: $4,302

Resale Value: $4,418

Costs Recouped: 102.7%

General Time Commitment: A few days

Removing an old garage door and replacing it with an attractive, sturdy new one could return every dollar of your initial investment, according to the Cost vs. Value report. It’s an effective way to improve your home’s appearance from the outside while increasing your home’s functionality for years to come.

With an average cost of $4,302, which includes the door and the cost of labor, it’s also a relatively affordable renovation. While most homeowners would likely hire someone to help install the new garage door, it is something that you could potentially do on your own (with the help of a friend) over the course of a weekend.

If you hire someone to install the door for you, they will likely come to your home twice: first, to take measurements and give you a quote, and then again to install the door.

Manufactured Stone Veneer

Average Cost: $10,925

Resale Value: $11,177

Cost Recouped: 102.3%

General Time Commitment: One month

Removing the vinyl siding and adding a stone veneer to the bottom third of your home’s street-facing façade is an effective way to help increase the value of your home, returning 102.3% of the cost of renovation. First impressions matter when it comes to selling a home, and stone veneer is a popular look right now.

Whether you tackle this project yourself or hire a handyperson to help with the installation, this project will take several days to complete. If you choose to hire someone, understand that the construction days might not be successive, so the exterior of your home could be under construction for several weeks to a month or longer.

Entry Door Replacement (steel)

Average Cost: $2,214

Resale Value: $2,235

Cost Recouped: 100.9%

General Time Commitment: One week

A new, safe front door is an attractive quality to prospective homebuyers. Replacing your entry door and jambs with a steel door, “including clear dual-pane half-glass panel, jambs, and aluminum threshold with composite stop,” should get you a good bang for your buck, according to the Cost vs. Value report.

Even better, you and a friend can probably handle installation on your own, though you can certainly hire an installation expert. If you decide to go the pro route, they’ll likely need to come to your home to take initial measurements and then return for the installation. Another option is to measure and order the door yourself and just get help with the installation.

Recommended: 32 Inexpensive Ways to Refresh Your Home

Minor Kitchen Remodel (Midrange)

Average Cost: $26,790

Resale Value: $22,963

Cost Recouped: 85.7%

General Time Commitment: Four to eight months

When it comes to kitchen remodels, less may be more, at least when it comes to ROI. According to the Cost vs. Value report, major kitchen remodels recoup anywhere from 31.7% to 41.8% of costs. Meanwhile, a smaller upgrade recoups nearly 86% of costs.

What does a minor remodel include? Think faster-turnaround jobs like installing a new sink and faucet or replacing items like cabinet fronts, cooktop, oven range, refrigerator with new models, countertops, or floors.

When creating your budget, you’ll probably want to factor in the cost of expert help, such as an electrician, plumber, and contractor. You’ll also want to be realistic about how long you can devote to the project — and be without a working kitchen. Expect several months at minimum for a remodel.

Wood Deck Addition

Average Cost: $17,051

Resale Value: $8,553

Cost Recouped: 50.2%

General Time Commitment: Three to six months

Nothing beats enjoying family and friends on a deck in your backyard on a sunny day. Potential buyers are typically rightfully happy to pay extra for a deck, and a wooden deck installation could recoup half of what you spend. And ideally, you’ll get the chance to enjoy the deck before you sell your home.

A deck installation is a pretty large project. It will likely need to pass an inspection and adhere to your city’s building codes, and it could increase your property taxes and home insurance costs. So it pays to get the job done right the first time, which may mean enlisting the help of a designer or architect. These pros can map out an initial plan, and a contractor can handle the building.

An online home renovation cost calculator can help provide you with a rough idea of how much a wooden deck — and any other home upgrade project — could cost.

Remodeling Projects With the Lowest Potential ROI

While these upgrades may not deliver the biggest returns, they could still be worth exploring if they fit your budget and lifestyle needs.

Primary Bedroom or Bathroom Addition

Average Cost: $157,855 for midrange; $325,504 for upscale

Resale Value: $47,343 for midrange; $73,875 for upscale

Cost Recouped: 30.0% for midrange; 22.7% for upscale

General Time Commitment: Four to eight months

Adding on a primary bedroom or bathroom may enhance your living experience, but it might not add much to your bottom line. Despite the project’s hefty financial and time commitment, it generally fails to deliver even one-third of the investment.

However, while not a great return, a home addition project of this size could change to the value of your home. For example, a $300,000 home that adds a primary suite for $157,855 could potentially return about $47,000 on the investment. A home that sells for $347,000 instead of $300,000 is a 15.6% increase in the home’s value. If you were to get enough use from the addition to justify the other cost you can’t recoup, it could still be a fine investment.

Again, these figures are purely hypothetical, and the value of expanding your home can depend on a multitude of factors.

Recommended: Homebuyer’s Guide

Bathroom Addition

Average Cost: $57,090 for midrange; $104,733 for upscale

Resale Value: $17,237 for midrange; $27,830 for upscale

Cost Recouped: 30.2% for midrange; 26.6% for upscale

General Time Commitment: Four to eight months

A bathroom remodel tends to be cheaper than a primary bathroom addition, and it generally sees a slightly better potential ROI. But again, a bathroom addition or any large remodeling project should be considered in terms of both ROI and what you want to get out of your home while you are living in it. And that’s a calculation that only you and your family can make.

Making it Happen

Home renovation shows make upgrades look quick and easy. And while sometimes they can be, in many cases, renovations can be costly and time-consuming. As you consider which ones to make, you will likely want to factor in your return on investment (ROI).

Not all remodeling projects provide the same level of ROI. Projects such as replacing a garage door or adding a stone veneer to your home’s façade tend to see better ROI than adding an extra primary bedroom or bathroom. But ROI is only one consideration. You should also need to consider what you want to get out of your home and whether the time and cost of taking on a big project are worth it.

If you decide you’re ready to roll up your sleeves and get some home repairs or renovations done, see what a SoFi personal loan can offer. With a SoFi Home Improvement Loan, you can borrow between $5k to $100K as an unsecured personal loan, meaning you don’t use your home as collateral and no appraisal is required. You can use the funding however you like, our rates are competitive, and the whole process is easy and speedy.

Turn your home into your dream house with a SoFi Home Improvement Loan.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SOPL0623003

Congratulations on the new home. But hang on. The garbage disposal isn’t working as it should and the hot water doesn’t seem to be hot anymore. A home warranty can ease the headaches and financial strain of fixing or replacing appliances and home systems, but any contract will require much more than a glance.

A policy can be purchased directly from a home warranty company at any time, not just upon a move-in. In some cases, the seller may provide a home warranty with the sale of the home.

Home warranties can help protect new homeowners and existing owners from troubles here and there, but is a home warranty really worth it?

What Exactly Is a Home Warranty?

A home warranty—different from homeowners insurance—covers specific items such as home systems (things like the HVAC system), washers and dryers, kitchen appliances, pool equipment, garbage disposals, and exposed electrical work.

Homeowners insurance, on the other hand, covers theft and damage to a home from perils like fire, wind, and lightning strikes.

While homeowners insurance is typically required by a mortgage company, home warranties are optional.

Price of a Home Warranty

The cost of a home warranty can range from $350 to $600 a year, possibly more for coverage for items not on the stock home warranty list. Extras may include pool systems and septic systems.

Those who purchase a home warranty will pay that annual premium. If they do call in a service provider, they will likely have to pay a fee for service calls, too.

Depending on the extent of the issue, the service call may cost anywhere from $60 to $125.

Recommended: How Much Are Closing Costs on a New Home?

Pros of a Home Warranty

While the above fee may seem pricey, the real pro of having a home warranty is it could save a homeowner a bundle on repairs in the future. HomeAdvisor reports that the average national cost to replace an HVAC system ranges from $5,000-$10,000, and a new water heater ranges from $872-$1,745. Both of these items would likely be covered under a home warranty.

Another benefit of a home warranty is pure convenience. If something breaks, a homeowner calls the warranty company, which will likely have a list of technicians at the ready. This means homeowners won’t have to spend time researching and vetting the right people for a repair or replacement. As the saying goes, time is money.

Then there’s resale value. When selling a home, homeowners with a home warranty may be able to transfer the warranty to the new owner, which could be a bargaining chip for those attempting to sell an older home. (Some home warranties are non-transferable, so it’s up to sellers to do their due diligence when adding this to the deal.)

Cons of a Home Warranty

A downside of a home warranty is that it can be complicated to understand. Every purchaser should carefully read the contract before signing and ask all the questions they need to in order to understand the warranty.

For example, a home warranty may come with a financial limit per repair or per year. If someone ends up having one heck of a year with the appliances, some of those repairs may not be covered.

Recommended: Most Common Home Repair Costs

You may need to request additional coverage for appliances that are considered optional or replaced frequently. And will your Sub-Zero fridge and Wolf range be covered if they go kaput? (Not likely.) Most warranty companies list excluded items on their sample contracts.

Ask: Will the plan repair or replace a broken item? If a repair is considered too expensive, the provider might offer to replace the broken item—but give you only the depreciated value.

Claims can also be denied by the warranty company for a variety of reasons, including if it believes an appliance hasn’t properly been maintained. The warranty company can also ultimately decide if a problem is worth fixing or not, despite how the homeowner feels about the situation.

Home warranties also cannot guarantee timeliness. If something breaks, homeowners may have to wait longer than they’d like to get it fixed.

Home warranties will also likely not cover preexisting conditions. If a person moves into a home with a termite problem, the warranty will likely not cover the cost to repair issues. Before you sign the warranty, the company will probably come inspect all the items covered, and could deny coverage for certain items.

Choosing the Right Home Warranty

Choosing the right home warranty comes down to personal choice and research. It’s important to look into each contract to see what is covered, what isn’t, the cost of services, and more.

While searching for the right home warranty, it may be best to go beyond online reviews. Rather than looking on public listings, head over to websites like the Better Business Bureau and search for individual companies.

Is a Home Warranty Really Worth It?

A home warranty could be the right call for people who are not up for having to perform repairs themselves or don’t have time to hire technicians.

For those buying a new construction, a home warranty may likely be unnecessary as many newer homes come with some type of guarantee. Also, because everything is newer, it may be less likely to break early on.

Individual appliances may also come with their own warranties, so make sure to check each one to see if it’s still protected before spending extra money on it with a home warranty.

One more way to figure out if a home warranty is worth it is to check out the home’s inspection report. If there are red flags about a home’s condition, it may be a good idea to purchase a home warranty to cover any additional expenses that crop up.

Alternatives to Home Warranties

If homeowners are worried about protecting their investment but aren’t sure a home warranty is right for them, there is an alternative: Build up an emergency fund.

Homeowners can start stashing away cash into an emergency savings fund that they can dip into whenever they need repairs done. This acts as their own “home warranty” without having to pay a premium to a company.

To take it one step further, homeowners could also create a spreadsheet with the names of repair workers when they need something fixed.

The Takeaway

Are home warranties worth it? Anyone looking into purchasing one will want to take a close look at the annual cost, the charge for service calls, exactly what is and isn’t included, and how much of a replacement item is covered.

If you’re a new homebuyer, SoFi Protect can help you look into your insurance options. SoFi and Lemonade offer homeowners insurance that requires no brokers and no paperwork. Secure the coverage that works best for you and your home.

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SoFi Insurance Agency, LLC. (“”SoFi””) is compensated by Experian for each customer who purchases a policy through the SoFi-Experian partnership.

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Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SOPT0623004

Legislation providing for a tax credit for first-time homebuyers was introduced in Congress in 2021 but is still making its way through Congress as of June, 2023. A revamp of the first-time homebuyer tax credit from 2008, the proposed First-Time Homebuyer Act of 2021, would modify the first-time homebuyer tax credit, increasing the allowable dollar amount of the credit from $8,000 to $15,000.

Unfortunately, this bill hasn’t passed, so there is currently no federal tax credit for first-time homebuyers. (A separate bill, the Downpayment Toward Equity Act of 2021, was introduced in the House of Representatives and the Senate in 2021, provides financial assistance specifically to first-generation homebuyers to help them purchase a home that they would occupy. This hasn’t passed either.)

Here’s everything you need to know about the history of the first-time homebuyer credit and what the future may hold.

What Is the First-Time Homebuyer Tax Credit?

The first-time homebuyer tax credit refers to a tax credit given in tax years 2008, 2009, and 2010 worth up to $8,000. It’s possible the term may also be used in the future as legislation for a new first-time homebuyer tax credit was introduced in the House of Representatives in April 2021.

The new proposed first-time homebuyer tax credit would typically be worth up to $15,000 for buyers whose adjusted gross income doesn’t exceed 160% of the median income for the area.

Recommended: The Cost of Living By State

First-Time Homebuyer Act of 2008

For first-time homebuyers who purchased a home between April 9, 2008, and May 1, 2010, a one-time tax credit of 10% of the purchase price, up to $7,500 in 2008 and increased to $8,000 in the next two years, was available. It was part of the Housing and Economic Recovery Act of 2008. The credit was for home purchases of up to $800,000 and phased out for individual taxpayers with higher incomes.

For home purchases made between April 9 and Dec. 31, 2008, the credit had to be repaid over 15 years, making it more of an interest-free loan than a true credit. Homebuyers taking advantage of the tax credit in the following years had repayment of the credit waived. Homebuyers who left the property before a three-year period were required to repay a portion of the credit back to the IRS.

Proposed First-Time Homebuyer Act of 2021

The First-Time Homebuyer Act of 2021 would allow qualified buyers a refundable tax credit of $7,500 for individuals and $15,000 for married couples filing jointly.

This bill amends the 2008 law to allow for higher purchase prices, revises the formulas for income, and revises rules pertaining to recapture of the credit and to members of the armed forces. It was introduced in the House by Rep. Earl Blumenauer of Oregon in April 2021 but is not yet law as of June 2023.

What Can Be Deducted After Buying a Home?

Amounts eligible for the proposed tax credit would include the purchase price of the home. The amount of the credit is 10% of the purchase price.

Given that the maximum is $7,500 per individual and $15,000 per married couple filing jointly, if you and your spouse purchased a home with a mortgage loan of $500,000, the 10% credit would amount to $50,000. You would receive a tax credit of $15,000 if you filed jointly.

If you purchased a home for $102,000 with a spouse, 10% of that would be $10,200. You would be able to claim $10,200 for the credit if you filed jointly.

Here are some possible deductions now for homeowners who itemize, though most taxpayers take the standard deduction instead:

•   Mortgage interest on up to $750,000 of mortgage debt (or up to $375,000 if married and filing separately), including discount points paid to reduce the interest rate on the mortgage.

•   Up to $10,000 of property taxes when combined with state and local taxes.

•   Home office if you’re self-employed or a business owner but not an employee of a company.

If you sell your main home and have a capital gain, you may qualify to exclude up to $250,000 of that gain from your income, or up to $500,000 if you file a joint return with your spouse.

Recommended: Mortgage Interest Deduction Explained

Who Is Eligible for the First-Time Homebuyer Act of 2021?

First-time homebuyers purchasing a principal residence would be eligible for the tax credit. Not your first time buying a house? You may still be able to qualify.

A first-time homebuyer is defined as someone who has not owned an interest in a property for the past three years. So even if you had owned a home in the past, you might be eligible to receive this credit if it hadn’t been in the last three years.

Other qualifications include:

•   A modified adjusted gross income that is under 160% of the area median income.

•   Purchase of a property that is not above 125% of the area median purchase price.

•   Must live in the home as a principal residence for the tax year.

•   Must be over 18 years of age.

To note: If you claimed a first-time homebuyer credit under the 2008 law, you would be able to claim it again. But you could claim the new credit only once, for a first purchase. Also be aware that a copy of the settlement statement must be attached to your taxes.

How Does the Tax Credit Work?

If the bill passed, the new homeowner would file for the first-time homebuyer tax credit on their taxes. The credit would first be used to offset any taxes owed by the homebuyer. Then, as a refundable tax credit, the homebuyer would get money back on top of the amount of the credit after their tax bill had been paid.

For example, if you owed $4,000 in taxes after accounting for withholdings, and you qualified for a $15,000 tax credit, you’d apply that toward the amount you owe in taxes. You would get the rest back ($11,000) from the IRS.

Taxpayers must stay in the home for the duration of the tax year in order to receive the credit. If the property is sold within four years, taxpayers may need to pay a portion of the tax credit back. The amount is subject to a schedule, which is as follows:

•   Dispose of property before the end of Year 1: Repay 100% of the credit

•   Dispose of property before the end of Year 2: Repay 75% of the credit

•   Dispose of property before the end of Year 3: Repay 50% of the credit

•   Dispose of property before the end of Year 4: Repay 25% of the credit

Homebuyer Tax Credit vs Homebuyer Grant

Another first-time homebuyer program has been introduced in Congress to help with the costs of obtaining a home. The Downpayment Toward Equity Act would award a grant of up to $25,000 to first-generation homebuyers who come from socially and economically disadvantaged groups.

The down payment would need to be for a principal residence and would not need to be repaid after 60 months of occupancy. More details on the two proposed programs can be found below:

Help for First-Time Homebuyers

Although new federal legislation hasn’t yet delivered support to first-time homebuyers, there are other first-time homebuyer programs that can help with costs.

A first-time homebuyers guide will walk you through the process of buying your first home and help answer questions.

Are you crunching numbers? Try this mortgage calculator tool. Keep in mind that some private lenders (like SoFi) allow a down payment for first-time buyers that may be even lower than FHA loans.

The Takeaway

A first-time homebuyer tax credit of up to $15,000 has been proposed for qualified buyers. That would take some of the pressure of taking the plunge into homeownership. But Congress has not passed legislation to put the credit in place.

If home buying remains mysterious, the SoFi loan help center can help clear the fog.

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Whether you’ve just moved into a new home or want to breathe new life into your current one, refacing cabinets in your kitchen could really transform the space.

Cabinet refacing involves changing the cabinet exterior surfaces only, and can cost significantly less than a full cabinet replacement. How much will it set you back? The cost to reface kitchen or bathroom cabinets ranges from roughly $4,000 to $10,000, with the national average coming in at around $7,000.

Read on to learn what factors affect refacing costs, how to keep a cabinet makeover project within your budget, and how to get started.

Average Cost of Cabinet Refacing

Cabinet refacing allows you to give your kitchen a refresh at a significantly lower price tag than a full kitchen remodel. The exact cost will depend on the materials you choose, the size of the room, labor costs, and where you live. However, the cost typically runs between $4,273 and $10,056, or an average of $7,158.

If you have a small kitchen, DIY the project, and choose budget-friendly materials, you could spend a lot less than the average cabinet refacing cost. On the other hand, if you have a large kitchen, hire a contractor, and go with top-of-the-line materials, you could spend significantly more.

Recommended: 20 Small Kitchen Remodel Ideas & Designs

Cabinet Makeover Costs by Budget

The good news is that you can give your cabinets a refresh on virtually any budget. Here’s a look at what you can accomplish at different price points.

Budget: Under $1,000
If you’re looking to spend less than $1,000, you can likely reface the cabinets in a small kitchen yourself using laminate veneers. However, you may need to keep the original hardware.

Budget: $1,000 to $5,000
With more wiggle room in your budget, you may be able to hire a contractor to reface your cabinets using laminate or wood veneer, and also replace the hardware. However, you may not be able to add accessories like a built-in wine rack or under-cabinet lighting.

Budget: $5,000 to $10,000
With this budget, you can likely hire a contractor to install high-end wood veneer and hardware, plus add cabinet accessories, even for a large kitchen. With a smaller space, you may be able to reface your cabinets with solid wood.

Budget: $10,000 to $15,000
If you can spend $10,000-plus on the project, you should be able to hire a contractor to install new solid wood doors and drawer fronts, choose luxurious hardware, and add fancy accessories. You might also be able to add a couple of custom cabinets to match your newly upgraded cabinets.

Recommended: 9 Ways to Keep Inflation From Ruining Your Kitchen Reno Budget

Reasons to Reface

Refacing old cabinets can give your kitchen an updated look for 30% to 50% less than a full cabinet replacement. This makes it an appealing option for homeowners looking to do a kitchen renovation on a budget. What’s more, there are a wide range of resurfacing options to choose from, so you can likely find a look that fits your kitchen design vision. The process is also faster and more environmentally friendly than a remodel.

Keep in mind, however, that refacing might not be the best option if the existing cabinets are damaged or you need a better kitchen layout. While refacing can make your kitchen look and feel brand new, it won’t change its layout or functionality.

Standard Options for Refacing

When you reface cabinets, there are four common types of finishes you can choose from. Here’s a look at each option.

Plastic Laminates

You can also reface cabinets with plastic laminate. The laminate is cut to size and applied to the cabinet boxes and doors using a special adhesive. This is one of most budget-friendly refacing options, ringing in between $1,000 and $3,000. However, plastic laminate is not as resistant to chipping and cracking as other refacing materials.

Wood Veneer

Wood veneers give you the look of wood cabinets without the high cost. They come in thin sheets designed to mimic standard species of wood, such as oak, cherry, maple, and ash, and run between $2,500 and $6,000. While wood veneer is stronger than laminate, it’s not as durable as real wood.

Rigid Thermofoil (RTF)

Rigid thermofoil laminate is another budget-friendly refacing choice. It’s made of plastic (Formica or melamine) but looks like wood and requires little care. Just keep in mind that the melamine version of RTF is not recommended for hot or humid environments. Refacing with RTS can run roughly $1,000 to $3,000.

Solid Wood

Solid wood refacing material is the priciest option but also the longest-lasting and easiest to repair. A solid wood refacing project can run anywhere from $5,000 to $10,000. However, the cabinets will look high-end and the doors and drawers will be extremely durable.

Other Factors that Affect the Cost of Refacing

When coming up with your budget for a cabinet makeover, there are some other costs and upgrades you may want to factor in. Here’s a look at add-ons that can level up your kitchen refresh.

•   Hardware replacements Replacing all the hardware on your cabinets can cost anywhere from $100 and $1,000, depending on the material and style.

•   Crown molding Depending on the materials used and the labor involved, installing crown molding can run around $700 to $2,100.

•   Under-cabinet lighting Having strip, built-in, or puck lights installed under your cabinets can run $200 to $300 per light. If your budget is tight, you can get peel-and-stick lights for as little as $20 to $30.

•   Glass If you want to add glass inserts to some, or all, of your kitchen cabinets, plan on spending an extra $100 to $300 per linear foot of glass you add.

•   Handy accessories If you’re interested in adding some extras, such as a built-in spice rack, built-in wine rack, pull-out trash can, or a lazy Susan, you’ll need to add some additional funds to your refacing budget.

Getting Started

If you are ready to move forward with refacing, it can be a good idea to shop around and get estimates from at least three contractors.

As you interview potential installers, be sure to ask about their experience with cabinet refacing and if they’re insured and licensed. You may also want to ask the following questions:

•   What kind of refacing material do you recommend for this area?

•   How long will this project take?

•   Can I use my cabinets as soon as you’re done?

•   How long will the refacing last?

•   Do you make any changes to the interior of the cabinets?

•   Does the estimate include handles and drawer pulls?

•   Will you remove the doors and drawers to work on them at your shop or do all the work at my home?

•   Can you use hardware that I’ve already purchased?

•   Can you add features like crown molding, under-the-cabinet lighting, or glass inserts?

•   Do you offer a warranty, and if so, what does it include?

Recommended: 10 Steps for the Perfect Bathroom Remodel

Financing Your Home Improvement

While a cabinet makeover can give your kitchen a face-lift for an affordable price, you’ll still need to come up with a significant sum of cash to cover the cost of materials and labor. If you’re eager to get going but don’t have enough money on hand, you may be able to finance the project using a home improvement loan.

A home improvement loan is essentially a personal loan designed to be used to pay for home upgrades and renovations. Available through banks, online lenders, and credit unions, these loans are typically unsecured (meaning your home isn’t used as collateral to secure the loan). You also don’t need to have any equity built up in your home to be approved. Instead, the lender decides how much to lend to you and at what rate based on your financial credentials, such as your credit score, income, and how much other debt you have.

Once approved, you receive a lump sum of cash up front you can then use to cover the cost of refacing your cabinets. You repay the loan (plus interest) in regular installments over the term of the loan, which can range from five to seven years.

If you think a personal loan might work well for your cabinet makeover project, SoFi could help. SoFi’s home improvement loans offer competitive, fixed rates and a variety of terms. Checking your rate won’t affect your credit score, and it takes just one minute.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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