Renovation Financing: Can I change Contractors?

I recently was asked this question and thought it would be a good blog post.

 

The technical answer is yes, however you need to be careful if you decide to fire your contractor. 

 

1st and foremost the contractor you are firing will need to be made whole.  They will need to be paid in full for the work they have completed.  The tricky part is they will have to agree with you that they are being paid in full.

 

You will have to work with your lender to get the new contractor approved.  You will need to get a homeowner/contractor agreement, W9 and License if required by the state.  If you do not have enough funds remaining in the escrow account to pay the new contractor and keep the original contractor whole, you will need to have additional funds available to complete the project.

 

It can be done, you just don’t want to do it on a whim!

November 14, 2009