Financing A New Roof
Depending on materials, sizing and labor, the cost of a new roof typically numbers in the thousands of dollars. Between paying down credit card balances, children’s school expenses and the home mortgage payment, most homeowners have little available cash to bankroll such a large home improvement project. The first step in financing a new roof is getting bids from roofing contractors to determine how much it is likely to cost. Local experts at Voorhees roofing firms are happy to prepare a competitive roofing quote for local homeowners.
One way people finance a new roof is paying by credit card. This requires a large amount of available credit on the account and the ability to pay down the balance in future months. Financing a large project by credit card is one of the least cost-effective ways to go borrowing because of high interest rates on the balance. However, it may be a viable choice for people expecting to pay it off in a short time.
Some roofing companies have established partnerships with home improvement lenders while others can refer customers to a lender with whom they have worked in the past. Some finance firms extend credit for new roofing that includes a grace period in which borrowers can repay the balance without accruing interest fees. Borrowers usually wind up paying more for their roofing over time, but in a situation where a new roof is an absolute necessity, knowing that a source of help is available is often a great relief.
Lenders that specialize in home improvement loans offer online applications and fast decisions
However, they do scrutinize the applicant’s credit history, and it can be tough for those with imperfect credit to get funded. Some loans are available that charge added fees for applicants with poor credit.
Tapping into home equity to pay for a roof seems a natural solution. However, a couple of issues may bar the way to this financing avenue. First, a homeowner must have sufficient equity to qualify for such a loan, and in the wake of the real estate crisis and home devaluations, many do not. Also, just like mortgage financing, home equity loans for anyone but those with impeccable credit are hard to come by.
People who do have the savings to pay cash for roofing but hesitate to spend their nest eggs might look into a savings-secured loan at the branch where they bank. These financial products come with fixed terms and rates so that monthly payments are predictable and easy to work into the budget. With the security of a savings account behind them, applicants often have better luck in securing such a loan.
Another possible source of financing is government-backed lending institutions such as the Federal Housing Administration. FHA’s Title 1 loan insurance backs unsecured sums up to $7,500 for homeowners or long-term lease holders and has an overall lending limit of $25,000 for improvements on a single-family house. Paperwork and approval of these types of financing must be handled by the mortgage lender on the property. FHA Title 1 loans are not dependent on home equity. Fortified Roofing of Voorhees NJ would be happy to answer any question you have about roofing, new gutters or new roofs.
Term of the day, courtesy of Fortified Roofing, Voorhees NJ:
Home equity
Home equity is the difference between a home’s current value on the real estate market and the homeowner’s mortgage balance. For example, if the market value of the home is $100,000 and the homeowner owes the mortgage institution $50,000, the home equity is $50,000.
Voorhees roofing FAQ of the day:
What are my options if I can’t get financing?
One option is to have temporary repairs made on the roof while saving for future reroofing. While this is not the best course of action since the house could sustain water damage meanwhile, it may be the only one possible. Alternatively, qualified homeowners could check into community home improvement funding for low-income residents.
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If you would like to ask a question regarding roofers, a new roof installation, roof leak repairs, skylight options or gutters and downspouts please contact Fortified Roofing today!
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