Essential Things to Know About Financing a New Roof

For your roofing replacement project to be a success, it is important to invest in the right materials and a reliable contractor. This also means having enough money to be able to purchase the roof system that you need and hire the roofer that can best do the job.

Fortunately, there are several ways that you can finance your roofing project. From cash savings to equity loans, you’ll surely find something that suits your needs. Continue reading to learn more about the various roof financing options that you can choose from.

Cash

Cash from your savings is probably the simplest way to finance a new roof. Its biggest advantage is probably the fact that you don’t need to worry about repayments and interests in the coming years. In a way, it can help you save on costs, especially if you consider the long term.

However, if paying in cash means that your savings would be depleted, you might want to take more time in considering your options. Some questions you might want to ponder: Would you be comfortable in sweeping your bank account clean? Do you have enough money to cover for the job plus any other surprise expenses that may come along the way? It’s not uncommon for roofers to only discover other problems in the roof or the home once they start the project. So in such cases, would you still be financially prepared for the additional expenses? The general rule is to have extra money that’s at least 10% of the total estimated cost.

If these questions concern you and you simply don’t want to risk spending all of your savings, you can pick another route. The following are some of the roof financing options that may be available to you:

A HELOC

A HELOC, or Home Equity Line of Credit, is commonly used for a variety of home improvement projects, including roof replacement. You can draw on this line of credit to finance your new roof and pay the amount over a specified period. In this type of roof financing, you will be given an amount that you can borrow against, and you only have to pay the amount that you have used for your project. It is a little similar to how credit cards work, but a HELOC will usually require your home as collateral.

Government Loans

Federal Housing Administration (FHA) Title I loans are typically used to finance home improvement projects that aim to make your home more livable and useful. That said, it can definitely be used for financing your new roof. To qualify for this type of loan, you have to be the property owner. It also helps to have good credit and limited home equity. Another important thing to note about this type of roof financing is that it is usually offered by banks and other qualified lenders while FHA insures the lenders against possible losses.

Credit Cards

Credit cards are a simple and straightforward tool to finance your roofing project. They are a very convenient mode of payment. And in some cases, credit card issuers may even offer 0% interest promos. The downside, however, is that credit cards usually have shorter terms, so you may see yourself paying for significantly higher monthly repayments. Also, credit cards generally come with high interest rates, so you might really want to take your time in thinking about the pros and cons.

Rebates

Rebates can be offered to qualified homeowners who choose to install energy-efficient roofing. You might want to check the Database of State Incentives for Renewable Energy (DSIRE), where you can find all relevant state, local, utility and federal incentives for enhancing your home’s energy efficiency. Some of these incentives can be used towards financing your roof, so they are definitely worth checking out. You can also check with the Department of Energy for any tax credits and rebates that you can get for installing an energy-efficient roof.

Company Financing

In company financing, your roofing contractor will coordinate with a bank to help you with the cost of roof replacement. Typically, roofing companies have their preferred banks with which they want to work with, and they have specific roofing options that they want to offer to their clients. Sometimes they also have special promotions that are even better than what banks and lenders offer. This is often due to volume lending, which enables roofing contractors to get special rates from the banks they usually work with. As a result, they are able to pass on these benefits to customers like you.

Opting for company financing requires some precautions, though. You have to make sure that you are dealing with an established and reputable business. Protect yourself against scammers by verifying their qualifications and any certifications they claim to have. Make sure that they have an actual address and phone number in case you need to reach them. It is very important to choose roofers who are honest and trustworthy.

Lastly, always ask about the fine print. Make sure to read the entire contract and that all the details are clear to you. If something seems vague, don’t hesitate to ask questions until the issue has been explained to you thoroughly. Keep in mind that you should always have a good understanding of any agreement you’re signing off on. One of the things that you should especially look out for are hidden costs and other vague or confusing clauses that may lead to misinterpretations or miscommunication.

It also does not hurt to ask friends or relatives who have experienced this particular type of roof financing. Their situations and the specifics of their contracts may be different from yours, but learning from others’ experiences is a good way of equipping yourself with information.

Regardless of the roof financing option that you choose, there are a few basic yet important details that you should pay close attention to. One is the amount that you need to pay every month and the length of time you need to do these repayments. Make sure that these are clearly defined in your contract so that you have proof and you are aware of how much it will set you back in the following months. This would allow you to prepare accordingly and really gauge your financial capacity. If you have specific concerns, don’t hesitate to discuss them with your contractor. They will surely be willing to help you overcome any hurdles or ease any worries that you may have. Remember that open communication between you and your roofer is crucial. This is the only way that they can properly guide you through your roof replacement project.

Do not forget to consider your own personal feelings as well. Make sure that you are comfortable with the deal you are getting into. Plan the actual roof replacement project as well as the financial aspect of it so that you can be fully prepared for this long-term, significant investment.

Kingdom Roofing offers a range of services that can cover a range of roofing needs — from residential roof repair to roof replacement. Rest assured, our team is highly skilled and experienced in providing quality results. Call us at (941) 217-2411 or fill out our contact form to request a quote.