If your roof has started to leak or you know that it’s a matter of time, the expense of a roof replacement project has got to be on your mind. You don’t need us to tell you just how expensive new roof installation or roof repair can be, especially in the current climate. Roofing projects rank among the most expensive home improvement projects, but you shouldn’t have to pay for it all in a lump-sum payment. The long bill can indeed be intimidating. Thankfully, there are plenty of roof repair financing options to choose from based on your resources and requirements. Some of them can even cater to the needs of middle-income households.
Read on to learn about four flexible financing roof repair options that are available to Big Al’s Roofing customers.
1. Personal Loan:
A roof loan or a personal loan is a loan that provides you with a fixed sum of money to get the job done. The borrowed money is then repaid over a few years with an interest rate. Your credit score and history determine the duration of the repayment and, to some degree, the interest rate that you’ll qualify for. The better your credit history, the lower the interest rate. If you cannot pay for the roof repairs or new installation upfront, you can approach a bank or credit union and have your agreement drawn out. In this type of loan, the best part is that you won’t be expected to gamble on your property or any other assets in the form of collateral. Defaulting on your roof replacement loan will, however, affect your credit rating and your ability to qualify for future payment plans.
2. Roof Company Financing:
Many roof companies have begun to offer their own new roof financing options. The proprietors of such businesses know just how expensive roof repair or installation can be, so they provide some relief in the form of loans with no hidden costs involved. Of course, the company is likely to charge interest, but most of the other financing options will come with this drawback too. Nevertheless, in many ways, going for a company’s financing options is way better than asking for a loan from a bank directly.
If you live in Miami, you can arrange a fair deal on your house’s roofing from Big Al’s Roofing. We recognize that most of our customers don’t have the cash on hand to buy a new roof, so we offer a plethora of roof repair financing options to choose from. Contact us to get a quote on the project and find out what your monthly payments will be.
3. Credit Card:
If your credit score and credit history are strong, paying for the repairs through a 0% interest credit card may be the best option for you. This option is especially ideal for people who are looking to invest in low-cost maintenance. However, the debt repayment duration will be considerably shorter than with personal loans; even some roof companies provide a more extended repayment timeline. Thus, it will ultimately boil down to your financial resources.
4. Home Equity Loan:
Home equity loans or lines of credit (HELOCs) are another way to finance a new roof. It’s also a solid option if you want to complete other home improvements and finance a roof. This loan, also known as the second mortgage, allows you to use your home’s equity as collateral on the borrowing. The repayment timeline of this type of loan can lie anywhere between 5 years to 30 years, depending on several factors. It can be an excellent option for financing roof repairs, although there are certain disadvantages to it. For one, it takes too long for the approval to come through. The second drawback is that you’d be making a huge gamble on your house and you could lose the property if you fail to keep up with the repayments.
Another drawback of a HELOC is that the annual percentage rate can fluctuate. While you may have a fixed rate for your first mortgage that holds your payments more or less steady (there is some fluctuation if you escrow your property taxes and homeowners insurance payouts), a HELOC is sometimes pinned to an index rate. That means your payments can go up annually. This is too risky for many homeowners.
Things to Consider When Financing a Roofing Project
There are a number of factors you should consider with each roof financing option. Here are some of the factors that may influence your decision.
Principal and Interest
The two factors that will affect your payment are the principal amount that you’re borrowing and the rate of interest. Unlike a mortgage, your roofing project financing won’t include an escrow payment for property taxes and insurance. Shopping rates is a good way to start your research.
Cash On Hand
A bank may allow you to finance 100% of your roofing project, but a roofing company may require you to put some money down before they process your paperwork. You may also want to pay more out of pocket to keep your monthly payment more manageable. If you are just a few thousand dollars short of covering the entire expense of the roof, consider putting the difference on a credit card and paying it all in one lump sum.
Regardless of which type of loan product you use, your interest rate will affect the loan terms and your monthly payments. If you have questionable credit and you want low monthly payments, you may have to put more money down. Even if you have strong credit, the lending company may set their interest rates a little higher to mitigate some of the risks they’re assuming.
If you just need short-term financing for your next roofing project, you need to know if there’s a prepayment penalty. If there is, you might be in for an unpleasant surprise when you try to pay your balance off early.
Adjustable vs. Fixed Interest Rate
If you plan on paying off the money borrowed for your roofing financing within a year, you may not have to worry about your interest payments increasing. But if you get an adjustable rate loan with a low rate and it starts to increase, your payments will follow suit. This is an important factor when comparing loan products.
Some banks and roofers are upfront about their lending fees, but others will include them in the loan amounts without properly explaining it to their customers. These fees can be substantial and can significantly affect the cost of your roof project. One way to avoid hidden fees is to work with a reputable roofing contractor.
Florida Independent Roofing Contractor
For years, Big Al’s Roofing has been a South Florida mainstay. We approach roof financing the way we build roofs: from a place of honesty, professionalism, and expertise. We can also help you finance a new roof for your home. Call today to discuss a new roof replacement or repairs on your existing roof.