After researching, weighing the different options, and choosing the right roofing contractor the next step comes financing. A new roof can be expensive and overwhelming to figure out how to afford all the materials and installation that comes with it. Luckily, if you haven’t stashed away enough cash to pay for a new roof, there are a variety of options to obtain its financing. EMA Construction can help you find the right financing option for you and your budget.
Home Equity Line of Credit (HELOC)
With a home equity line of credit, your home is used as collateral and the loan can be stretched out for a certain number of years with low monthly payments. Home improvement has become the number one use of HELCOs so it makes sense for most homeowners to use the credit to pay off their new roof overtime. According to mortgage broker, Ted Rodd, generally speaking a home equity line of credit is faster and less expensive than refinancing. There are other contributing factors to consider such as your current mortgage rate, the value of your home and how much you owe on it, and your credit scores so make sure to consult a mortgage broker before taking out the equity on your home.
Home Improvement Loan
If you wish to not use your home as collateral to finance your new roof, a home improvement loan is an option that will keep your home’s equity intact. Instead a home improvement loan can be backed by your personal income or credit history to pay for financing. Similar to HELOCs, home improvement loans are low in interest and don’t have many other fees associated with them, but are harder to qualify for and are unsecured. To qualify, most home improvement loans require excellent credit history, a substantial income, and a history of good saving.
Federal Housing Administration (FHA) Title I loans
A FHA Title I Loan is a loan insurance program covered by the National Housing Act taken from the bank or other lenders from their own funds. Property owners who qualify for this type of loan typically have good credit and low home equity. The basis of a FHA Title I loan is to make a home more livable and useful, it can be used to pay for a contractor’s materials and labor, and can be used for energy conserving home improvements, such as a new roof. These types of loans are typically easy to obtain by simply filling out an application with a lender of your choice. To find an FHA-approved lender in your area, call HUD’s Customer Service Center toll-free: (800) 767-7468 for a list of lenders in your state.
Database of State Incentives for Renewable Energy (DSIRE)
Database of State Incentives for Renewable Energy (DSIRE) can help finance your new roof if it is energy efficient. The database has lists of policies and incentives by state for energy efficient improvements to your home, for more information click here to visit their website. Also research the Department of Energy for tax credits and rebates when refinancing an energy efficient roof.
If you are personally organized and careful with your spending and qualify for a zero interest credit card, you may use it towards your new roof. It is suggested to break the financing costs into 12 monthly payments and the card should be used solely for the purpose of a new roof.
If pulling from your savings to finance a new roof for your home is out of the question, then consider researching further the above financing options to find one that will work best for you and your family. Either way, EMA Construction’s qualified roofers will be able to assist you in your decision for the best possible outcome. No one should feel the burden of home improvement repairs.