Oh no! It’s raining outside and water starts dripping from the ceiling. If you’ve patched and repaired your old roof but are still having problems, it may be time for a new roof.
If you are like most people, you’ve put off getting a new roof for as long as you can because of the price. This isn’t just a small out-of-pocket expense. For many, financing a new roof means getting a line of credit or taking out a loan.
First things first. You need to know how much a new roof will cost. The average cost to replace a roof is about $7633.
If any of the damage occurred from a weather-related event, your homeowner’s insurance may cover some of the cost. If not, you need to consider your options for financing.
Get an Estimate from a Roofing Contractor
You need to get a few estimates so that you know the amount of financing you need. The cost will be determined by a few factors, such as:
- The time of year
- The size of your roof
- The materials used to replace it
- The cost to tear off the old roof
It’s important to get quotes from different roofing companies so that you can find the best price. Be sure that you research the roofing company you are considering.
The cheapest cost is not always the best. Check out reviews and testimonials before making your final decision. You should only deal with licensed and insured contractors.
Options for Financing a New Roof
There are a few options available that can help with this major home improvement. You should take a look at your current financial situation along with your credit history and score to decide which option works best for you.
Personal loans are short term loans that you can pay back over a set period of time. Just like with other loans, interest is calculated and paid back along with the borrowed amount.
For most personal loans, your interest rate or Annual Percentage Rate (APR) is based on your credit score, your income level, and the repayment terms.
There are many online lenders as well as brick and mortar businesses that offer personal loans.
In most cases, this is a bad idea for financing a new roof. The interest you pay back will be very high when compared to other types of loans.
If you have excellent credit and can get a credit card with a 0% APR promotion, it could be worth it. Most of these promotions only offer the 0% for a limited time and then, the APR could skyrocket.
It’s important to read the fine print to understand the terms after the promotion ends.
Home Equity Loan
If you have built up value in your home over time, you could use your house as collateral for a home equity loan. It’s important to be aware that you could lose your home if you default.
Another thing to watch out for is the cost a lender charges for processing the loan. You need to shop around for the lowest processing fees and the lowest interest rate.
Roofing Company Financing
It’s becoming more common for roofing companies to offer financing. If a homeowner doesn’t have enough home equity or has bad credit, this could be an option. Be sure you can fit these payments into your budget.
Cash is always the best option, but many homeowners don’t have enough on hand to pay for this type of renovation.
An FHA loan may be available if you qualify. An FHA loan has a fixed interest rate but if the borrowed amount is over $7500, the home will be used as collateral.
Do You Need Help with Financing?
The cost of financing a new roof can be prohibitive. We have deep experience in helping people find loans that meet their needs and fit their budget. And, we have a long list of satisfied past and current customers.
Bonsai Finance specializes in connecting loan seekers with the most ideal lender and loan offer. If you need a loan, a credit card or help solving any of your financial problems, visit our site today to learn more.
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How Personal Loans Work and More: Best Advice for 2019