While paying for a new roof is expensive, it’s a necessary investment when your roof needs replacement due to damage or old age. Financing costs are a great option when faced with the cost of roof replacement. This article will cover the two simple ways to finance your roof and protect your home.
Now you may be thinking:
- I need a new roof, but I can’t afford it now.
- Is there a way I can finance a new roof?
- I know that my roof has damage, but I’m waiting for bad weather to replace it, so my insurance policy will cover it.
- It’s hard to get reasonable financing rates to replace a roof.
Obviously, it is expensive to replace a roof, but delaying a replacement due to price constraints may cost you more in the long run because your roof will continue to deteriorate over time, creating more and more damage.
It’s a relatively straightforward process to get your roof replacement cost financed, and there are two easy ways to finance your roof:
- Finance through your contractor
- Open a Home Equity Line of Credit
Read on to learn more about both options:
Financing Your New Roof Through Your Contractor
Most roofing contractors offer private financing. Most often, the financing is secured through a third-party financing program, but some companies offer in-house financing. If you decide to finance your roof through your contractor, here are the three steps you can expect to take:
1. Select a reputable roofer that offers financing:
Before any roof work on your house can begin, choosing a good roofing contractor is important. For help selecting a contractor, visit “How to compare roofing contractors.” If you know you want to secure financing through your contractor, you must ensure that the roofer you select offers financing.
If you are interested in the financing process to pay for your roof, you should inform your contractor that financing is your intended path. Armed with this information, your contractor can create financing plans.
2. Apply for a roof loan through your roofing contractor:
Overall, your contractor should be able to walk you through each step. The application process will be done with the contractor’s direct help in their office, or they may send you an information packet that outlines the application process. More often, your contractor will have some part in the financing process.
3. Get approved and get your new roof installed:
Once approved for financing and work has been completed, your finance company will release the funds to pay your roofing contractor. With your contractor compensated for their work, the relationship between your finance company and contractor ends. Instead of paying your contractor, you will pay your financing company installments over time, similar to a car or student loan.
Home Equity Line of Credit (HELOC)
A home equity line of credit (HELOC) is a line of credit secured by your home that gives you a revolving credit line to use for significant expenses. The information below regarding a HELOC is for informational purposes only, and we advise you to speak with experts if you would like to look into this.
1. Do some online research
Now you’ll want to spend some time researching what a HELOC is and how it works. Talk to your friends and neighbors to see if they have used a HELOC before and their experience. Next, if you have a mortgage on your home, speak with your mortgage company about options.
2. Find a Lender
It is important to understand how interest rates and terms work. You want to find the loan that you are comfortable with. Most rates are floating, so be aware that the rate may change during the course of the loan.
3. Get an appraisal
More often than not, your lender will do the appraisal for you. However, if they will not, you will need to get your home appraised by a real estate appraiser. To begin with, you can look up your address on a site like Zillow to get a quick estimate of what your home is worth.
After you are approved for your HELOC, you can borrow money against your HELCO for home improvements such as a roof.
Things You Should Know About Financing Your New Roof
By using a financing company, you are entering into an agreement with your roofing contractor to ensure that they are paid for their work and the financing company to repay them the amount borrowed for your new roof. There are a few things that you should know before fully committing to financing your roof.
You will end up paying more by choosing to finance your roof.
Interest is attached to financing your roof, like buying a car or paying student loans, which means that over the lifetime of your roof, you will be paying the principal amount plus interest. Therefore the amount of interest will depend on several factors, including how much you were approved for financing, your repayment term, and your credit and loan history. Any of these factors can affect your interest rate.
Financing costs your roofing contractor as well as you.
Usually, financing your roof through a third party offered by a roofing contractor costs that roofing contractor a fee. That fee is determined by the payment plan provided or selected by you. In order for your roofer to account for this fee, they will often add it to your estimate. As a result, you typically pay not only the principal and the interest but also the contractor fee when you finance your roof.
Now that you understand how to finance your new roof, you’re ready to search for a great roofing contractor.
As a result, the contractor you select will play a vital role in the life of your roof replacement, how much it will cost, and more, which is why it’s essential to find a reputable one in your community.
Remember, this is a significant investment that protects all the contents in your home. Sometimes the best choice isn’t always the least expensive.
Since 1979, Holladay Grace has handled every project as if it were our home. If you’re local to the Colorado Springs community, we would be pleased to help you with your roofing needs.
Contact us if you are you interested in getting a quote for your new roof.