Being a homeowner or a property owner is complicated and expensive. When you find out you need a total roof replacement, it may be financially impossible to plan around existing financial obligations like childcare expenses, bills, car payments, and home upgrades.
There are so many responsibilities that a homeowner bears, and receiving the news that you need a new roof (which can cost upwards of $8,000) can be overwhelming. You might be asking, “how on earth can I pay for this?”
Working in the greater Milwaukee area, we’ve seen it all, and we’ve worked with clients in the same exact situation. We have financed hundreds of houses just like yours because those who work in the roofing industry don’t expect you to shell out thousands of dollars right on the spot for a total roof replacement.
That is why we have compiled all of the ways to finance a new roof. With this information, you’ll have an easier time making the financial decisions surrounding your investment in your home. And hopefully, at the end of the article, you will have a solution to those brain-frying financial problems.
Five Ways to Pay for Your New Roof
There are a ton of options when it comes to financing and they can all sound complicated. Different types of loans, financing through a credit card or roofing company, all of it seems like a jumbled mess.
Here are all of the ways you can finance your roof and pay in installments so that when the time comes to purchase a new roof you will know the best options for you.
1. Payment Plans
If you are working with a roofing company, there is a chance that you may be able to purchase a new roof on a payment plan. Hooray!
Payment plans are a type of payment method you can use to break up the total cost of your roof into installments. These plans typically have no interest and can last anywhere from 12-72 months.
The type of payment plan offered to you will depend on the roofing company. Many roofing companies do not offer payment plans that don’t go through third-party financing meaning you will have to pay interest.
Every roofing company will vary, so at your initial appointment make sure to question your sales representative. Ask them if they have payment plan options through their company, and what the length of payment and interest rates will look like.
Payment plans can typically be highly customizable. This is why it is ideal to ask as many questions as possible to receive a payment plan that fits within your budget.
2. Private or Third Party Financing
Financing options are very similar to payment plans. When a company offers to finance your roof, it means they will lend the money to you, and you will pay back that money with interest over time.
Most likely, your roofing contractor will offer to finance directly through the roofing company. This is something the individual company can talk you through during your initial appointment, as every company will vary in financing options.
The bright side to financing through a roofing company is that often, you can sign the paperwork in your home. This means the sales representative is available then and there to walk you through financing options.
If you believe this is the best option for you, it will be ideal to have a budget drawn up. Know your total monthly expenses ahead of time to get an idea of what you can afford to pay each month. From there you can choose a plan that will work best for you.
Through the roofing company (or even third-party financing) there are many options available for financing.
There could be multiple options offered to you: one-year plans, ten-year plans, plans with no interest or low interest. Evaluate your finances, and determine which plan is best for you long-term before signing.
If you can afford bigger payments, you can choose a one-year plan. These payments are likely to be over $750. If you would like to pay smaller amounts (ranging from $38-100) you can choose a ten-year financing plan.
Also, take into consideration the amount of interest you want to accumulate. Some plans have higher interest rates than others, making the total price you pay increase. This will be added to those monthly payments.
3. Financing Through Your Credit Card Company
Many credit card companies, such as Capital One, offer financing options for things like home and auto.
If you are someone who already has a credit card account, this may be the ideal option for you. Check-in with your credit card company to see their available options, and consider taking out a loan through them.
If you are looking for a way to build credit but do not already have a credit card, financing through a credit card company could be beneficial for you. But keep in mind, credit card companies often have higher interest rates (upwards of 12%), so be cautious when looking at the available loans.
Higher interest rates = more money you will have to pay back. Building credit is nice, but evaluate your budget before deciding to go with this option. If you can handle high monthly payments over the long term and feel strongly about building credit, this option could be for you.
4. Home Equity Loans
A Home Equity loan allows a person to borrow against the equity (value) of their home by taking out a second mortgage. This option is completed by the same bank that you took out your home loan with.
You can prepare to take out a home equity loan by evaluating your credit score, calculating your home’s equity (you’ll need 15-20%), and talking with your bank.
This option isn’t ideal for everyone, as they may not want to take out a second mortgage, but is great as a last resort as long as you are able to keep up with monthly payments.
This way, you are still able to make payments for your new roof and go through a familiar and reputable bank.
5. Personal Loans
If you want to work with your existing bank or credit union but don’t want to take out a second mortgage on your home, personal loans are an option.
Personal loans allow you to cover the costs of a new roof replacement without putting any of your belongings at risk. For example, when you take out a home equity loan you are taking out that loan against your home. If you fail to repay the loan, your home could be at stake,
When you take out a personal loan, you aren’t putting any of your belongings like your home on the line. You are simply borrowing the money based on your credit score. If you fail to repay the loan on time your credit score will drop, but you won’t necessarily lose your home.
Again, as long as you can keep up with the monthly payments, this loan is ideal compared to a home equity loan.
Where Should I Start With Financing a Roof Replacement?
Now that you know what options will provide payment plans, the next step is to determine which plan is best for you. Take a strong look at payment lengths, interest rates, and your budget to find out what you can handle monthly. That will give you a strong foundation when you look at the actual numbers of the different financing options.
Depending on what options you choose, you can work directly with your roofing company and the financing options they provide. Or, you can work with your personal bank or credit card to take out the loans best suited to your needs.
It all depends on who you trust to handle this big financial decision. Go with your gut- if you feel like you want your roofing company to just handle it directly because you wouldn’t have to manage payments yourself, go with it. If you trust the professionals at your bank and you’ve worked with them for a long time, that might be where you feel most comfortable.
Regardless, it is up to you to take the initiative and contact the correct people. Call your bank, roofing contractors, and credit card companies of your choosing to get a good feel for who you want to work with.
If you are looking at financing through a roofing company in the greater Milwaukee area, we are here to help! Contact Rescue My Roof today to schedule your inspection and estimate, and speak to your salesperson about the financing options we offer.
If you don’t live in Wisconsin, never fear! Here are some articles for you so you can learn about how expensive the roofing process is.
Read More: How Much Does a Roof Replacement Cost?
10 Steps to Installing a New Roof: What You Need to Know