Replacing your roof with a new one costs a substantial amount of money. You most likely won't be able to pay for it out of pocket. On average, a roof replacement can cost almost $8,000. If you don't have the savings to cover that amount of money, you can use loans as well as a payment plan to pay for the roof. There are roofing companies that offer plans for financing the roof. You can also apply for a home equity loan. Each roof financing option comes with its own drawbacks. It is, therefore, important to talk to a professional financial advisor on the best option for your situation. You also want to read up on the different financial options before talking with an advisor.
Get Quotes
Getting quotes from at least three roofing companies can help you figure out if you actually need financing. If you notice that the quotes have large differences, find out the reason. You can also educate yourself on roofing materials and read about the best roofing practices. Now that you have an idea of how much your new roof will cost, see if the financing options available can cover the cost of the new roof.
Compare Financing Options
Once you have reviewed your options for financing your new roof, choose the option that has the lowest interest rate. This ensures that you pay the least amount of money for your roof. If you want to pay off your debt faster than its maturity date, choose a financial option that doesn't have penalties for prepayment. These penalties can cut into the cost you are saving in interest.
Another thing to consider is the timeline for acquiring financing. If your roof requires major work, you will have to choose an option that allows you to secure the money in a timely manner. The roofer can inform you on how long you can wait before addressing the roof issues for better financing.
You can finance your new roof through your homeowners insurance. You can also seek roofer financing. Some home improvement stores also offer roof financing. Credit cards are another option. It is also possible to use a personal line of credit or home equity loans. There are also government options like the FHA Title 1 loan.
Homeowners Insurance
Your homeowners insurance policy or roof warranty may be able to cover some of the costs for your new roof. Check them out to see how much financing you actually need. If your roof was damaged by a storm, your roofer can let you know. Your insurance may cover this kind of damage. When it comes to coverage, you should start the claim process before starting repairs. This ensures that the cost that comes from the work is covered.
Roofer Financing
Roofers are aware of the fact that clients can't pay for their work unless they have some kind of financing. As a result, many roofers provide payment plans. When considering roofer financing, compare interest rates. You can also pay in cash. Before financing your roof with roofer financing, find out what other clients have said about the roofing company in regards to this kind of financing.
Home Improvement Store Financing
Stores, like Lowe's and the Home Depot, provide loans for home improvement projects. The loans usually come in credit card form and can only be used in the store. You have to pay the loan off in a set period of time. These loans also have a minimum amount you can spend on purchases in the store. So, if your roof repairs are lower than the minimum amount set by the store, it may not be an option for you.
Another thing to keep in mind is these store credit cards don't include the cost of labor for your roofer to work on your roof. These cards are typically for homeowners who like to work on home improvement projects themselves. When it comes to fixing a roof, it is wise to use a professional. Your roofer can work with you so that you can use the card to pay for materials and find another way to pay for labor.
Before getting financing from your local home improvement store, look at the interest rates and find out if there are any prepayment penalties. You also want to review any other terms that come about with getting the store credit card.
Credit Cards
Although you can cover the cost of a new roof with credit cards, you want to be careful. Unless you can pay off the debt within a month, you may have to pay a high interest rate which will increase the cost of the roof. If you are able to qualify for a credit card, it is possible that you can get a loan from the bank that has better terms.
Personal Line of Credit
A personal line of credit usually has a lower interest rate than credit cards. You can get a loan that is for home improvements specifically. You can also use collateral to get an even lower interest rate. When it comes to finding the best loan, explore different institutions besides your own bank, like credit unions.
Home Equity Loan
You can finance your roof through home equity loans and home equity lines of credit. With these type of loans, your home is collateral. Due to this, you can pay a low interest rate. You can also get the loans even with bad credit. However, there needs to be some equity in the house in order to do this. Talk with your bank to find out which of the two options is best for you.
FHA Title 1 Loan
The Federal Housing Administration Title 1 Loan doesn't require equity on your house if the loan is below $7,500. You can also get a fixed rate even with bad credit. There are also no income requirements. However, you do need to either own a home or have a lease that is long term. You have to live in said home for more than 90 days. The loan can only be used for the repairs you applied for. Your debt to income ratio should be lower than 45%. You can get the loan through private providers, making it possible to shop around for the best deal.
The Wrap Up
Finding the right financing for your new roof requires doing your research and seeking the guidance of professionals. Regardless of how you finance the roof, it is important to seek out a roofing company that has a good reputation. H&R Roofing has over 20 years of experience. We are known for our excellent reputation amongst our clients. We also have an A+ with the Better Business Bureau. Contact us today.