When your roof is damaged from standard wear and tear over the years or due to a natural disaster, repairing or replacing is of utmost importance. However, roof repairs and replacements are often an expense that most homeowners don’t have the cash set aside for.
A full replacement can be costly. As of early 2021, the cost of a new roof for most homeowners is substantial. Especially when it’s unexpected. The good news is, there are several financing options for your new roof. We’ll look at those below.
Financing Options for Roof Repair/Replacement
Below, we will take a closer look at six options for financing your roof repair and replacement. Of course, you always have the option of paying cash upfront if you can, but most homeowners don’t have that much saved up.
Insurance
Whether you pay a monthly mortgage or not, you should have homeowners insurance in place. This will protect you against financial loss due to theft, fire, or other damage. In some cases, a roof repair/replacement on your roof can be handled through the insurance company, but this is only feasible if your roof was damaged for reasons besides wear/tear.
If this is the case, you’ll want to contact your insurance provider to determine how much they will cover and how you would receive payment.
HELOC/Home Equity Loan
If homeowner’s insurance doesn’t cover the roof repair/replacement, you may be able to finance it through a home equity loan or home equity line of credit. This method of financing allows you to borrow based on the difference between the value of your home and the balance left on your mortgage. If this is 85% or less, this may be a viable option.
This is beneficial because you can typically get a lower rate than other options. After all, the home is the collateral to back the loan. This option is ideal for large expenses like roof repair/replacement- but you need a steady income, a strong credit score, and equity in your home.
Personal Loans
Another option for covering a large expense like a roof repair/replacement is a personal loan. In this case, a lender offers you the lump sum upfront. The amount, as well as the interest rate, depends on your credit score and history. You must take the time to review the terms before you sign to make sure that you’re getting the best terms and payments.
Roofing Company Financing
Some roofing companies offer in-house financing. After all, they understand that the cost to repair/replace a roof is a lot to pay for all at once. Therefore, they offer financing options that allow you to make payments over time.
They will probably charge interest, but this may be the best option for those with less than ideal credit and little to no equity in their home. However, carefully go over the terms and make sure that the monthly payment fits within your budget.
Credit Cards
Homeowners with strong credit may be able to qualify for a 0% APR credit card. A credit card will typically offer a higher spending limit than personal loans, and if you can get a deal with no interest, you can save a lot of money.
However, these typically have shorter terms for full repayment when compared to other forms of financing. Many times, the 0% APR is an introductory offer that expires in 6 to 12 months.
HUD/Home Improvement and Repair Loan
Finally, you may be able to use an FHA Title I home and property improvement loan. This option is insured by the Department of Housing and Urban Development and is offered through select lenders.
The loan amounts vary based on the credit history of the homeowner as well as the amount needed. These loans have longer repayment terms and fixed interest rates and can be used on properties, including manufactured homes that have been occupied for at least 90 days.
Things to Consider with Roofing Financing
Before you choose which option you want to use, there are some things that you need to think about. First of all, the cost of the repair/replacement may help determine the options you have. Some of the factors that determine cost are the size of the roof, the time of year, and the condition your current roof is in. When you apply for roof financing, you’ll want to add up these costs.
Additionally, you’ll want to shop around and get quotes from several different roofing companies. They don’t all provide the same quality of work, and they don’t all charge the same amount. However, most of them will offer free quotes. Before choosing which company to work with, make sure that you ask for referrals from your friends and family and get references when possible.
Final Thoughts
If you need a roof repair/replacement, contact A & J Reliable, Inc. to get a quote. We will be more than happy to help you with this and any other home improvement project you have in mind.
