If it’s time for a new roof or significant repairs, you may not be able to cover all the costs out-of-pocket. The average cost of a roof replacement is around $8,000 according to HomeAdvisor and of course this price is dependent upon which roofing materials your choose, and the size of your roof. Most Albany roofing companies require a half down deposit in order to get on the job schedule. So even if your roof replacement costs you $8,000 half down would mean $4,000 cash. This is still pretty steep for most people, not everyone has thousands of dollars laying around to toss at a new roof. If this is true to you and your situation, do not worry! You have many other options to choose from to make your roofing dreams come true.
Some Albany roofing companies offer their customers financing plans or you may even consider applying for a home equity loan. We will provide you with information on the most popular options available to you, for securing a new roof and ways to finance it. Of course we are only here to educate you on what options there are to finance a new roof, and you should always consult with a financial advisor to better understand your personal options.
First Get Quotes or Roofing Estimates
Before you take out a loan or investigate your roof financing options, you need to see how much the roof will actually cost you. The first thing you want to do is google the best roofing companies in your local area. Read all of the roofing company’s reviews, look at their social media pages, and get a better idea who these people are. If everything checks out, their work is clean and beautiful, they have glowing reviews, and post consistently about their work, its then time to schedule an estimate.
Most Albany roofing companies will come out and give you a free estimate, as long as you are the owner of the house and the house is not for sale. If you do not meet these criteria then you may be charged anywhere from $100-200 for the service. Why do they charge you if your home is for sale? Well because if they are paying an estimator to come out to your home, give you a roofing quote, and you decide to use that quote as a discount off the house being sold and not get the roof done, that now costs the company money. If you do decide to pay for an estimating service and want to get your roof done by them, that $200 comes off the price of your new roof.
Obtain 3 Estimates
Now you have 3 roofing estimates to look over, are they significantly different? Chances are they are going to be pretty similar in price, we do suggest that you do not just go with the cheapest estimate. You get what you pay for especially with roofing contractors, the last thing you want is to have your roof done cheaply and pay another roofing company to come and fix mistakes. The roof is arguably the most important portion of your home, it protects you and your family so be sure the get the job done right the first time. Going with the cheapest roofing quote can end up costing you much more in the long run. Find the best roofing company in your area with great reviews, or word of mouth references.
Ways to Secure Financing
Once you have made a list of finding ways to finance your roof replacement, you want to figure out the lowest interest rate. This will help you pay the least amount for a new roof or repair. If you think you can pay off the debt quicker than its term, you can choose an option with no prepayment penalties. Some lenders will charge a prepayment penalty so check with you bank and be sure you won’t be charged fees for early payoff.
When considering your roof financing options remember to not only check interests rates associated with the loan but also other costs that can be included. Knowing how long it will take you to secure the funds is very important, if you have an urgent repair problem or reroof that must be scheduled, you might not have time to wait for funds. Your local roofing contractor can tell you how urgent your repair or reroof is, and if it is too risky waiting to secure a more favorable financing option.
Roof Financing Options
- Personal Line of credit
- Home equity loans
- Homeowner’s insurance policy
- Credit cards
- FHA loan
- Roofer financing
- Roof financing at home improvement stores
- Other government options
Personal Line of Credit
If you’re looking into a loan for your roof, the best option is opening a personal line of credit. This option tends to have a low interest rate along with low monthly payments. Your bank might offer lines of credit specifically for home improvements, by offering collateral will help keep interest low. Don’t assume you must stick with your own personal bank, you can reach out to others banks who might offer lower rates on home loans.
Home Equity Loan
HELOC, or home equity lines of credit or loans, are two of the best choices for roof financing options. If you don’t have the best credit or want to minimize your interest rate this is a good choice for you. By using your home as collateral you have better chances to negotiate a lower interest rate than compared to other loans. There are some fine print things to keep in mind with this roof financing option, you’ll need to have equity built up in your home to take advantage of this.
Home equity loans are somewhat different and more flexible in allowing more money to be withdrawn over a period of time, and lengthening the time in which you need to pay the entire amount back. Every person is different and their circumstances will dictate if a HELOC or home equity loan is a better fit. If you have multiple home improvement projects then a HELOC loan could be a better fit for you, but if you’re just looking for a quick new roof then a home equity loan is a less expensive option. As always it is best to review your personal finances and options with your financial advisor who can give a more detailed list of options for you.
Homeowners Insurance Policy
Before securing roof financing options, you need to determine if your homeowners policy offers coverage for any damage to your roof. If your insurance agency will cover only part of the cost, then you’ll need to find other financing options. Your local roofing contractor can tell you if the damage done to your roof was storm or weather related, or if there is another cause contributing to the need of a repair or replacement. If you think you roof will be covered by your insurance company, start with filing a claim before you begin and repairs or replacements.
Most Albany roofing companies will take credit cards, but not all of them so be sure to ask. If your local roofing contractor does accept credit cards be aware that they may charge you a fee in doing so. When a roofing company offers the use of credit cards, they are usually charged a fee anywhere for 3-6%. They might make you pay the entire fee or split it with you. If you think you’ll be able to pay off the full cost of your roof replacement, then you won’t need to worry about the interest rate. If you think it will take you some time to pay it off, then make sure to find out exactly how much interest you’re looking at.
The typical cost of an average sized roof with no compilations costs roughly around $7,000, if put on a credit card with a 15% interest rate could cost you $200 per month. If you only paid the minimum amount of $200 per month you would end up paying an extra $3,000 on top of cost for your roof. Of course that exact cost is dependent of your credit card company, and paying more than the minimum will reduce that interest.
Unlike HELOC you do not need to have equity in your home in order to qualify for this loan, as long as it is less than $7,500. FHA loan offers fixed rates and no minimum credit score or income requirement. To qualify for this loan you must meet these criteria; you must own the house, you must have occupied the home for at least 90 days, the loan can only be sued for a roof replacement or repair, and your debt to income ratio must be under 45%. This type of loan is more accommodating for the average homeowner.
Some larger roofing companies off payment plans for their customers. They realize that many people cannot afford their work unless they help with financing options. If you do decide to use their roof financing options be sure to check out their reviews.
Roofer Financing at Home Improvement Stores
Some home improvement stores like Lowe’s and home depot offer loans for home improvement projects. There is a purchase requirement of $2,000 or more, and also be aware that store credit cards do not cover the cost of labor. These types of cards are used most often by homeowners who are doing roofing projects themselves or with help of friends and family.
Other Government Options
An FHA loan is the most popular government financing option, but there are others. FHA 203K loan is a great option if you have some equity in your home and need financing on a larger project. The loan minimum is $35,000, which will allow you to get top quality materials and work done on your home. Once disbursed the loan is then added to your mortgage and payments.
What Is The Best Way to Finance Your Roof?
Each person has different circumstances that determine the best method to financing a roofing project. Getting the most amount with the smallest interest is the goal, be sure to check all of your options to get the best rate.