Different Ways to Finance Your New Roof
Roof replacement is a big investment, and not all homeowners have the cash on hand to fund such a project. Fortunately, many roofing companies offer flexible payment terms. This is one reason you should hire a reputable roofer for your project.
Here are a few different ways you can finance your roof replacement project.
Cash
Paying in cash is the cheapest way to finance your roof replacement. Because it’s not a loan, you don’t need to have a good credit score and you also don’t need to pay interest. However, not everyone can afford to pay cash.
It’s not a good idea to use your cash if it’s your emergency fund. If do you have enough money in your savings to finance the project in cash without dipping into your emergency fund, however, this is the best option.
Credit Card
The downside of funding your roofing project via credit card is the high interest rates. But if you have a credit card that offers a 0% APR promotion, you can cover the cost of your roofing project without paying interest. Still, you must have good credit to get approved for a 0% APR credit card. Also, the cost of the roof repair may exceed your credit limit.
Personal Loan
The better your credit score is, the lower the interest rate on your personal loan will be. Some lenders specialize in personal loans for people with bad credit. Keep in mind that personal loans vary by rates, fees and requirements. Make sure to do your research to determine the best loan for you. Often, personal loans are available within a week or even the same day.
Home Equity Loan
Those who have significant equity in their home can benefit from a home equity loan. Since it’s a secured loan, your home is considered the collateral and you can usually qualify for lower interest rates, no matter your credit score. You may also be able to deduct the interest from your taxable income if you are investing in a roof that can significantly improve your home.
Cash-Out Refinance
This may be a good financing option if you have a good amount of home equity. In a cash-out refinance, you reinvest money back into your home through upgrades that can add to its value and functionality. The rates of a home mortgage are low and payment terms can be extended up to a few years.
