How to Finance a Roof


Roofing company financing

Contractors know that many customers don’t have cash available to pay for a major roof repair. That’s why some roofing services offer loans — either directly or through a lending partner. While accepting a roofing loan on the spot may seem convenient, it pays to check your other options to make sure you’re getting the best interest rate, loan term, and monthly payment possible. It’s possible that a roofing loan will provide all the best loan features available, but you won’t know if you don’t shop around.

Home equity loan

Another roof financing option is to take out a home equity loan. A home equity loan is a type of secured loan, meaning your house acts as collateral. Secured loans typically carry low interest rates.

Like most standard loans, once the loan has been approved and loan documents have been signed, all the funds are disbursed to you. You repay the loan in regular monthly installments.

Home equity line of credit (HELOC)

As the name implies, a HELOC is a line of credit. A line of credit is similar to a credit card: The lender gives you a specific spending limit, and you can borrow as much or as little as you need up to that limit. In fact, you can take a lump sum, pay it back, and borrow it again for a set number of years (generally 10).

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Like a home equity loan, a HELOC uses your home as collateral. HELOCs also carry low interest rates, and when you’re taking on a home improvement project as large as a roof replacement, it makes sense to pay as little interest as possible.

Credit card with a 0% promotional rate

If you have an excellent credit score, there’s a chance you qualify for a new 0% intro APR credit card. These cards typically give the cardholder 12 to 18 months of interest-free borrowing power.

For example, if the promotional rate on your card lasts for 18 months and your damaged roof costs $17,000 to replace, 18 equal payments of $945 would pay for the roof replacement in full — without having to pay any interest.

Things to consider when financing a roof

Borrowing money to install a new roof is nothing like borrowing money to pay for a kitchen remodel or destination wedding — you can’t postpone the project until you have time to come up with the cash on your own. Instead, you have to make the best decision possible with the limited time you have. Here are some things to consider before making your roof financing decision:

  • Have I obtained bids from more than one licensed roofer so that I know I’m getting the best deal?
  • Am I confident enough in my ability to make the monthly payment to risk my home or other valuable asset by taking out a secured loan?
  • Do I have cash in my emergency fund to pay for part of the roofing project so I can finance less?
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A new roof may not be as exciting as a dazzling new kitchen countertop or a luxurious hot tub, but it’s hard to overrate the feeling of having a roof over your head. If your roof has seen better days, consider these options when it comes time for a replacement.

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