How Does Financing Work When I Need A New Roof?

How Does Financing Work When I Need A New Roof?

Your roof is designed to protect your home from the elements. When it’s damaged, either due to regular wear and tear or storm damage, you’ll need to decide on a repair or replacement. Unfortunately, the cost of an extensive roof repair or full replacement is an expense most homeowners are ill-prepared to settle out of pocket. The good news is that there are multiple roof financing options available to help you cover the costs, including cash savings, home equity loans, personal loans, roofing company financing, and more.

For your roofing replacement project to be successful and less stressful, it is important to work with a reliable local roofing contractor. Depending on your circumstances, here are some roof financing options that you can consider.

1. Cash Savings

Using cash from your savings is the simplest way to finance a new roof. You won’t need to worry about repayments and interests over the coming years, helping you save on costs in the long term. However, paying in cash means that you can quickly deplete your savings. You need to check if you have enough money to cover the new roof plus any other surprise expenses that might come along the way. It is a good idea to have at least 10 percent more put back than the total estimated cost.

2. Paying with Insurance

Your typical homeowner’s insurance protects you from financial loss when your home is damaged by a covered peril such as fire, theft, vandalism, and certain natural disasters such as windstorms, lightning, and hail storms. 

If you suspect that a covered peril damaged your roof, contact your insurance company immediately to begin the claim process. Your roofing contractor can also inspect your roof for storm damage and help you determine whether insurance will cover the cost of replacement.

3. Paying with a Home Equity Loan or HELOC

With a home equity financing option, you can borrow against available equity you’ve built up in your home over time. This is simply the difference between your property’s market value and the balance you owe on your mortgage. If your loan-to-value ratio is about 85% or less, a home equity loan or line of credit could be an ideal roof financing option for you.

4. Credit Cards

You may qualify for a 0% APR credit card if you have strong credit. You can either opt for a balance transfer offer or a new line of credit. Typically, credit cards may offer a higher spending limit compared to personal loans, and with zero interest, you can save a significant amount of money over the financing term. 

5. HUD Home Improvement Loan

You may also have the option to pay for your new roof with an FHA Title I home & property improvement loan. This financing is made available through qualified lenders or financial institutions insured by the Department of Housing and Urban Development. Loans offer fixed interest rates and longer repayment terms, and you may qualify if you own a property or manufactured home that has been occupied for at least 90 days.

6. Roofing Company Financing

You may want to finance your new roof through financing options available from a reputable roofing company. In many cases, professional roofers know that the cost to repair or replace a roofing system is too high to pay out of pocket all at once. These roofers provide financing options that allow for flexible payment over time.

Your roofing company will likely charge you lower interest compared to personal loans from mainstream lenders. It’s a great option if you have little home equity or less than ideal credit. You’ll need to read the fine print to ensure the required payment fits within your monthly budget.

In roofing company financing, your roofer will coordinate with a bank or other credit institutions to help you offset the cost of roof replacement. Certified roofing companies typically have their preferred banks to work with and may have special promotions as well. They are able to achieve that due to volume lending, enabling them to get special rates from the banks they regularly work with. As a result, they often pass on these benefits to customers like you.

Working with a Trusted Local Roofer

Regardless of the financing option you choose, you need to pay attention to important details such as the interest rate, the amount you need to pay each month, and the period in which you need to make these repayments. Ensure that these are precisely defined in your contract to allow you to prepare accordingly and gauge your financial capacity. If you have any specific concerns, don’t hesitate to discuss them with our team at StormForce in Jacksonville, FL. We are always willing to help you overcome any hurdles in financing your roof. Our team is highly skilled and experienced in providing quality roofing services and flexible financing to give you peace of mind. Contact us today to request a free estimate for your new roof or learn more about our financing options!