Roof repairs can be necessary after years of neglect or come on suddenly due to an unexpected weather event. Once you know your roof needs fixing or replacing, you must take a long, hard look at your financial situation and figure out which option makes the most sense for you and your family.
Financing roof repairs doesn’t have a one-size-fits-all solution. Credit history, income, and cash holdings are just a few of the things that will affect your decision on how to finance roofing home improvements. But reputable roof repair specialists, like those at tittlebrothers.com, will work with you to ensure you have financing for your roof’s needs.
The average roof replacement has a price tag between $5,100 and $30,000. Very few homeowners have that kind of money after their living expenses have been paid. There are affordable and feasible options to secure the necessary financing, including the ones listed below:
Paying for roof repairs in cash is the easiest way to avoid paying interest or being denied due to poor credit. However, not many people have that kind of cash laying around, unless it’s for an emergency fund.
Technically, roof damage could be considered an emergency. But if you dip into the funds, you run the risk of not having money for the next emergency. And there’s always another emergency waiting in the future.
Minor roof repairs will set you back $784 on average. Paying for partial roof repairs with cash while you figure out how to finance larger repairs is an option if your roofing situation is dire.
2. Personal Loans
If you’re willing to take on another monthly bill, a personal loan from your bank or an online lender is a quick and convenient way to finance your roofing repairs. Some banks and online affiliations offer home improvement loans tailored specifically for your home renovations, including an upgraded roof.
The total amount of the personal loan and the interest rate offered depend on your credit score and credit history. Even if your credit is circling the drain, there are lenders who specialize in providing loans to people with bad credit, though the interest rates are much higher, which costs more money in the long run.
For someone with an average credit rating, the interest rate for a personal loan is around 10%. With bad credit, that interest rate can increase to 30% or higher. Personal loans have longer repayment plans available compared to some of the other financing options.
If you choose the personal loan route, keep in mind that the financing funds might not be available immediately. It can take up to a week or longer for the application process to go through, though some lenders can quickly access your eligibility within a day or so.
3. Credit Cards
You’ve undoubtedly seen celebrity-endorsed credit card advertisements that ask what’s in your wallet. With the right credit card, your roof repairs are what could be the answer to that question and to all of your roof financing problems.
If you have excellent credit, you could potentially qualify for a new credit card that has an introductory 0% APR promotion for up to twelve months. If you’re financially able to repay the cost of the roof repairs in that time frame, the repairs are essentially interest-free.
However, credit limits are never guaranteed and there’s a chance you will need a secondary financing option to pay the entire balance of the roof repairs. Credit limits on credit cards can be higher than personal loans from banks, which may allow for more comprehensive roofing repairs.
4. Home Equity Loan
A home equity loan is a loan that uses your home as collateral. Also known as a second mortgage, the loan often has lower interest rates than credit cards or personal loans. Additionally, the interest that you do pay can potentially be deducted from your taxable income if the renovations substantially improve your home.
Using your home as collateral is a risky move. It should only be considered if you are confident in your source of income and won’t default on the payments, losing your home in the process.
5. Government Rebates
Federal and state government offer Title 1 loans for home repairs and upgrades to qualified households. These loans are generally awarded to people with low income but good credit standing.
In the push for renewable energy, homeowners can receive rebates and tax credits for making home improvements that are energy-efficient, such as solar panels. The Department of Energy has a complete list of the available rebates that can be applied for financing roof repairs.
6. Point-of-Sale Financing
Point-of-sale financing refers to loans made directly from the roofing company or contractor. The funds are often provided by a third-party company. Homeowners can get pre-approved quotes from several different lenders to compare rates before applying for financing.
Once approved, the funds could be available within several days, if not that same day. This type of financing does come with high-interest rates, but you also have more time to pay off the balance.
7. Homeowner’s Insurance
Before you begin exploring other financing options, check your homeowner’s insurance policy to see if it covers roof repairs. This option is only applicable if your roof damage was caused by a natural disaster or other circumstances rather than neglect or normal wear and tear. When it comes to problems with household items that need resolving, it’s a good idea to be covered by a home warranty. It’s always wise to look towards companies for this operating in your area, as they’ll be able to call out local contractors to help diagnose and address any problems that may arise. Those in North Carolina, for example, may want to look towards a First American Home Warranty as this company has over three decades operating in the region. Likewise, those located elsewhere will want to look for similarly prestigious companies there.
If you’re eligible for roofing repairs through your homeowner’s insurance, find out how much is covered and how you go about receiving the funds. Some insurance companies will deal with the roofing company directly, making your part in facilitating the repairs easier and less stressful.
Carefully look through your homeowner’s insurance policy. Even if the damage is covered, you may still be responsible for some of the repairs out-of-pocket.
If you can’t afford to replace the entire roof, consider a partial repair for the most damaged section of the roof and then start saving money for a new roof later down the road. If you set aside $100 per month for a replacement roof, you could have the money in cash with a year or two.
The size of the roof repairs, the time of year and the condition of the roof are all things that need to be taken into consideration when you’re weighing your roof financing options.
Extensive roof repairs or a total replacement may be overwhelming when you consider the total cost of the materials and labor. However, there are options that can help you pay for the repairs over time, such as your homeowner’s insurance, financing through the roofing company or with loans. If you must, you can dip into your savings for home improvements.
Before you decide how to best finance your roof, carefully consider your budget. Remember that in addition to roofing costs, loans come with repayment terms and interest rates.
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