The notion of “saving for a rainy day” hits close to home when your roof needs to be repaired. Whether the damage was caused by a natural disaster or general wear and tear, you have no choice but to repair your roof to keep you and your home safe. A roof repair is a costly endeavor and can feel overwhelming if you can’t pay for it out of pocket.
The good news is that there are various roof financing options available to help cover the costs. Consider the choices and pick the one that’s best for you. Here’s how to finance a roof repair.
A standard homeowners insurance policy covers your roof and the cost of repairing it if it gets damaged. Types of roof damage covered by insurance will depend on the terms of your policy and the reasons your roof needs to be repaired. Generally, your homeowners’ insurance will come in handy if the damage results from an act of nature or a sudden accident. Covered perils usually include fire, hurricanes, tornados, and ice storms.
While homeowners insurance can cover the cost of certain types of roof damage, an insurance payment isn’t guaranteed. Problems resulting from poor maintenance or general wear and tear are not eligible for reimbursement. In addition, you won’t be able to file a claim if your roof is near or has exceeded its intended lifespan.
Home Equity Loan
If insurance doesn’t cover your roofing repair, you can try a home equity loan. Also known as a second mortgage, this type of loan allows you to borrow against the equity built up in your home. Your home equity is the difference between your home’s market value and the balance you owe on the mortgage. You must have a steady income and strong credit to qualify.
A home equity loan is beneficial because you can get a low-interest rate since the home itself is used as collateral on the loan. However, falling behind on your payments puts your home at risk of foreclosure.
Depending on a lender’s approval factors and terms, you may be able to use a personal loan to finance your roof repair. Most personal loans are unsecured, so you don’t need any collateral to secure the loan. In this unsecured loan, a lender, credit union, or bank offers you a lump sum that you’ll have to pay over a set term.
Although not having collateral is an attractive option, you’ll likely pay a higher interest rate than you would on a home equity loan.
Government Funded Home Improvement Loan
If you don’t have sufficient equity to borrow against your home, a government-funded home improvement loan could fit the bill. Offered by the Department of Housing and Urban Development, these loans are made available through selected lenders. They are designed to help fund home improvement projects that improve or protect the livability of a property, like a roof repair.
Fixed-rate FHA Title I loan and FHA 203(k) standard loans require a lower minimum credit score and a debt-to-income ratio no higher than 45%.
You can also pay for a roof repair with your credit card. Compared to personal loans, credit card financing comes with a high-interest rate that may turn your roof repair into a costly endeavor.
But if your credit card has generous incentives, rewards, and even cash-back bonuses, using it to finance your roof repair may be worth it. If you have a strong credit score, you may qualify for a 0% APR credit card, which allows you to put your roof repair on the card and then pay it off in the next year. With an interest-free loan, you can save a significant amount over the financing term.
Roofing contractors know the cost to repair a roof is sometimes too high to pay with cash. So, many of them work with lenders and provide financing options that can help you manage the cost of your project. Terms and rates will depend on the contractor and your credit.
One of the major benefits of company financing is the quick approval process. Because most of the steps are done in-house, the process can be much more simple and straightforward than direct-lender financing. And thanks to volume lending, a roofing contractor can provide its customers with special promotions that beat traditional banks and other lenders.
Roof Financing Through Bill West Roofing
At Bill West Roofing, we know that roof repairs cannot wait. We also understand how challenging life can be in a difficult economy. As such, we’ve partnered with Green Sky Financing to help connect you to the cash you need to pay for your repairs. With Green Sky Financing, you’ll be able to benefit from lower fixed interest rates and an easy-to-understand repayment structure. Contact us today to further discuss details of our financing options available in Lee Summit, MO.