Financing Options for a New RoofPublished on Monday June 12, 2017
Roof replacement is an important investment. The good news — there are plenty of roof financing options available to make sure you’re not breaking the bank, shingle by shingle.
Financing a new roof, with the option to pay in installments, is how many homeowners get the roof they need when a roof replacement can’t be put off any longer. Let’s explore the most common roof financing options to help you choose one that’s right for you.
8 Ways to Finance a New Roof
A personal loan is a type of unsecured loan that provides homeowners with a fixed sum that is then repaid over a set term, typically a few years.
The advantages of financing with a personal loan is that there’s no collateral—you don’t have to gamble your home or another valuable asset and risk losing it if you can’t repay your loan—and you can usually lock in these loans at lower rates than credit cards, especially if you have good credit or better.
The cons? Personal loan rates are often higher than those of home equity loans since there’s no collateral backing the loan. You also can’t claim a tax deduction on the interest you pay on a personal loan.
Home Equity Loan or Home Equity Line of Credit (HELOC)
Home equity financing allows you to borrow money against available equity your home has built over time by evaluating your loan-to-value ratio (your outstanding mortgage balance versus the market value of your home). You typically need a loan-to-value ratio of 85% or lower to qualify for home equity financing.
A major benefit of home equity financing is that interest rates tend to be low compared to other roof replacement financing options due to leveraging the home as collateral. However, the risk involved in backing your loan with such a high-value asset means you should only consider this option if you have strong credit and a steady income.
Since all homeowners are required to purchase homeowners insurance, you may qualify for roof replacement financing through your insurance company if the reason for your roof replacement is directly linked to damage caused by an unforeseen event like extreme weather. Homeowners insurance will not cover damage caused by wear and tear over time.
Similar to home equity financing, cash-out refinancing allows you to take money out from your home equity by replacing your existing mortgage with a new home loan for more than you owe. You can then use the surplus to finance your roof replacement.
Cash-out refinance typically offers lower interest rates than home equity loans or HELOCs. You may also qualify for a mortgage interest deduction since the money from your refinance is being used to improve your home.
If you don’t have enough equity to borrow against your home, you may qualify for a government-insured FHA loan, available through the Department of Housing and Urban Development (HUD). Fixed-rate FHA loans, including FHA 203(k) standard loans and FHA Title I loans, require lower minimum credit scores than conventional loans as long as you have a debt-to-income ratio below 45%.
You can also pay for a roof replacement with credit cards, which may provide a higher spending limit than personal loans. If you have strong credit and can secure a card at 0% APR, you’ll save a significant amount of money over the financing term, though the repayment timeline is typically much shorter compared to home equity loans, personal loans, and company financing.
How does company financing work? Your roofer works with the bank to help you manage the cost of the roofing project, based on your budget and the roof replacement expense. Each company chooses banks that they’re willing to work with and the roof financing options that they’re going to offer to customers.
The benefits of company financing often outweigh direct-lender financing. Thanks to volume lending, companies that provide financing can offer customers special promotions that beat banks and other lenders.
Should You Pay for a Roof With Cash?
If you are able to afford it, cash is actually the best option when it comes to new roof financing. By saving and paying for a new roof out-of-pocket, you can avoid interest payments on home equity loans.
Unfortunately, most American homeowners don’t have that kind of savings. Drawing from your personal piggy bank just isn’t an option for many people, especially when it comes to more expensive home improvements.
Roof Financing Through Long Roofing
Long Roofing has convenient financing that fits every homeowner’s budget. We work hard to keep our roof financing options as simple as possible and understand that a roof replacement project can be a stressful time. Our goal is to give you the peace of mind you need.
Our Financing Options
Long Roofing works with each homeowner to determine what fits their budget. Roof financing options depend on the size of the job, the down payment amount, and the homeowner’s credit score.
We offer everything from Term Loans to lines of credit that the homeowner can use. For example: with a minimum of $5k financed, we can get you a payment as low as $12.50/month for each $1,000 financed.
Long Roofing’s roof financing can provide you with:
- Competitive rates
- Payments that fit your budget
- No hidden costs
- Unsecured loans up to $75,000
- Easy-to-understand paperwork
Financing through Long Roofing has major advantages. Due to the volume we push through the financing companies, we’re given special rates and packages for our customers. Smaller roofing companies don’t typically offer any type of financing, and those that do can’t offer competitive rates due to lack of volume.
Long Roofing respects your privacy. Using a web-based contract solution with end-to-end encryption, each homeowner fills out a credit application on an iPad.
Contracts are sent using a secure server, separate from our operations server to ensure no contractual information is sent through our email system. Once submitted to the office, the credit application with the homeowner’s personal information will not be accessible to our sales representatives.
We’re not going to get you on fine print. Our representatives sit down to talk with every decision-maker involved in your roof replacement project and clearly explain your options to be sure you’re comfortable with your roof financing.
Roof Replacement Financing Made Easy
Whether you’re looking for a shingle or metal roof, learn how you can qualify for new roof financing with Long Roofing. Check out our current promotions to see which roof financing option can help make your new roof a reality.
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