After deciding to install a new roof, you need to find ways to pay for it. Fortunately, there are several ways to pay for your new project, and it doesn’t always have to involve cash or a check. There are pros and cons to all of these payments, but some can help you get those much-needed repairs done when you don’t have cash on hand. Let’s look at the ways to pay for your new roof.
Cash or Check
Consider cash if you want an easy way to pay for your roofing project. This payment method has no complicated paperwork or an approval process. You just hand over cash to pay the deposit and the rest of the bill.
In most cases, the roofer will require some type of deposit. This deposit ensures that everyone is on the same page for the project. Without that, the roofer runs the risk of spending time on planning and ordering materials only to have the owner back out of a job. When you hand over cash, always get some type of documentation that you made the deposit or paid the bill in full. Cash cannot be traced like a money order, check, or credit card.
Speaking of credit cards, that is another way to pay for your new roof. Also, if you have a credit card that offers generous incentives and rewards, that is a bonus for you. New credit cards often offer 0% interest if you pay the bill within the year. Add that with a cash-back bonus, and you can partake in great perks. Remember that some roofers might charge a 3% to 5% transaction fee to process the credit card. You will want to ask before paying with this method.
Roof Company Financing
You may want to finance the project through the roofing company. This method can be helpful for those homeowners who don’t want to pay cash for a home improvement project. Many established roofing companies will offer to finance or work with a third-party financing vendor. Compared to a personal or home equity loan, the process is simple since most of the work is done within the roofing company’s office.
In some cases, you can apply for a personal loan. The loan approval process will vary from lender to lender, but you can use that money to fund your project. When choosing this method, you should shop around to save money on the interest or find better payment terms. Some loans are short-term, while others are considered long-term ones. Your interest rate can vary depending on your income, credit score, and creditworthiness.
Home Equity Loan
A home equity loan allows borrowers to secure funding for a fixed amount secured by their home. You will repay the loans like your mortgage, but you have a fixed payment over a set period of time. These loans are a great option if you have built up equity in your home. At times, these loans have lower interest rates than personal loans.
There are a few drawbacks to these loans. If you default on the loan, the lender could foreclose on your home. Your home is the collateral for the loan. Many lenders require consistent income and excellent credit scores for loan approval. Keep in mind that you can only borrow 85% of your home’s equity by law. The amount of funding that you can receive may be substantial, but there are risks with these types of loans.
Trying to get the insurance company to pay for your loan is challenging. When the cause of the roof damage is apparent, it can be easier to get funds for a repair or replacement. For example, if a tree crashes through the roof, then the insurance company will issue a check for the repair.
Over time, insurance payouts can be hard to determine because of normal wear and tear. In some situations, the insurance companies can cite a lack of maintenance or the roof’s age to deny your claim. If you want to work through your insurance company, you should speak to an agent and discuss any potential claims. Some roofing companies may be able to assist you with these tasks. Remember that if the exact cause of damage is not apparent, there is a good chance the claim will be denied.
Government Home Improvement Loan
While this option is not common, you could qualify for a government loan. Some homeowners have applied for an FHA Title I Property Improvement Loan. The Department of Housing and Urban Development offers these loans for homeowners, but you have to apply through a pre-selected lender. You must have occupied the property for 90 days, and the property needs to be a single-family home. According to HUD, the loan must be used to “substantially protect or improve the basic livability or utility of the property.” These property improvement loans should be used with a 203(k) Rehabilitation Mortgage. With these loans, you don’t have to worry about prepayment penalties.
Financing Options Are Available for Your Roof
When you need work done on your roof, it can be stressful to find the funding. These options are a few ways to secure financing to pay for your new or replacement roof. You can also reach out to RGB Construction. We can direct you to affordable financing through Mosaic, so you can have peace of mind and a new roof as soon as possible. Arrange for a no-obligation consultation by calling 856-264-9093 or fill out the easy online form.