Financing Choices When Getting A New Roof

Choosing the right roof for your home is a big step towards preserving the elegance and longevity of your house. A new roof can be costly, so it is a good idea to find out how to pay for it, as the actual installation effort is quite overwhelming. Thankfully, you don’t have to go through the roof financing process alone. There are several different options available to finance the roof.

1. Home Equity Loan

A credit line or home equity loan allows you to borrow against the existing equity that you have built up in your home over time. This is simply the difference between your home’s market value and the balance that you owe on your mortgage. If your debt-to-value ratio is 85 percent and under, a suitable roof financing alternative may be a home equity loan or credit line. The good thing is that you will get a lower interest rate as the loan has collateral to back it up.

The benefits of taking home equity loans are that they have lower interest rates and are suitable for high roofing costs, but they need a good credit score and/or steady income to qualify, and typically performed by your personal bank or mortgage bank

2. Financing by Roofing Company

Many roofing companies also offer roof financing options, such as those provided by Custom Financing Solutions. For certain cases, funding your roof repair with a roofing company may be a feasible choice if you don’t have much home equity or if your credit score doesn’t meet the typical lender thresholds. You need to read the fine print and ensure that the monthly payment needed is well within your monthly budget.

A roofing company’s financing options may be used even with less than sufficient credit score and it has quick processing but may (depending many factors) attract a higher interest rate.

3. Personal Loans

If you can access a competitive interest rate personal loan, it can be used to cover your replacement roof. A lender will give you a lump sum upfront payment for personal loans and then require you to repay over a set period of time, with a fixed interest rate. When you can negotiate a lower interest rate, even if the repayment period is longer, it can be a wise alternative.

With a longer repayment period, personal loans may be manageable and do not require collateral, but it also attracts higher interest rates, and typically only are accessible if your credit score is good or excellent.

Bottom Line

If you know your options and what they entail, paying for a roofing project doesn’t have to be overwhelming. Whether you want to finance via a roofing company, personal loan or home equity loan, do consider the overall budget in addition to the costs, interest rate and repayment duration.

If you’re a roofing contractor and wish to offer financing to your customers, sign up now and start offering all of your customers instant financing.