Roof Replacement Financing

Roof replacement financing

Orlando Roofing 

If you need a roof replacement but prefer to pay for it on a monthly basis instead of in one lump sum, you can explore roof financing options. There are several different kinds of financing available for your roof replacement. Some roofing companies offer in-house financing, the federal government offers loan assistance programs, and there are options for private loans to finance your roof as well. 

Roofing Company Financing

Many roofing contractors offer a financing option via a lending institution. If you are looking for a loan for your roof, submit an application for financing to your roofing company and find out how the rates and terms compare to other loan options. Your roofing contractor may be able to offer you a better rate than other institutions through their agreement with the lender.

At Castle Roofing Group, we offer an excellent rate on financing for your new roof. As of February 2022, we offer 12 months no interest and 103 months at 9.99% interest. Learn more about our current roof replacement financing offer. If you are not in the Orlando area, check with your local roofing companies about financing options.

Home Equity Loan 

A home equity loan is a loan that uses the portion of your home that you own as collateral. To find out the equity in your home, subtract the amount that you owe on your mortgage from the current value of your home. If you have paid $50,000 on your $150,000 mortgage, and your home is currently valued at $175,000, then you would subtract the amount you owe ($100,00) from the current value of the home ($175,000), resulting in a home equity of $75,000. A home equity loan is usually set up for 5 to 30 years at a fixed interest rate. In most cases, a lender will only finance up to 85% of the your home’s value, minus what you owe on your mortgage. In this case, that would be $175,000 x 85% = $148,750. You then subtract the amount you owe on your mortgage, which is $100,000, so you can expect a total loan offer of about $48,750.

In order to obtain a home equity loan, you will need to go through a somewhat lengthy approval process that will take several weeks or months. A home equity loan is a good option if the value of your home has increased significantly and current interest rates are better than your initial mortgage. Also, you might be able to claim the interest on the loan as a deduction on your taxes. 

Home equity loans provide lower rates than most personal loans because they are backed up by the value of your home. The downside to a home equity loan is that if you fail to pay the loan, you risk losing your home. If you have built enough equity in your home and are confident you will be able to make payments, then a home equity loan is a good option for you to finance your new roof. 

Home Equity Line of Credit

A home equity line of credit (HELOC) is like a home equity loan, but instead of providing a lump sum, the lender will open a revolving line of credit that you can use similarly to a credit card for a draw period, which is usually 10 years. Also, a home equity line of credit is financed at a variable interest rate, often with a lower introductory rate. This means it can be difficult to determine how much interest you will pay overall if you do not pay down the amount you owe every month. 

Similarly to the home equity loan, your house is used as collateral, meaning that you put yourself at risk of losing your home for non-payment. At the end of the 10 year draw period, you will be required to pay a lump sum for any remaining balance that you owe on your account, so you will need to prepare and plan carefully to ensure that you can meet the terms of the loan.

Federal FHA Loan for Roof 

The Federal Housing Administration (FHA) offers loans for home improvement. Here are three types of FHA loans:

Standard FHA 203(k) Loan

A standard FHA 203(k) loan allows you to borrow on the the projected value of your home after home improvements. The FHA will assign a loan consultant to you who will monitor the progress of  your home improvement project and ensure everything is being carried out as per the loan agreement.

Restricted FHA 203(k) Loan

A restricted FHA 203(k) loan allows for repairs up to $35,000, which will cover most roof replacement projects. 

FHA Title 1 Loan

This type of FHA loan is available for home improvement projects that will substantially improve the home’s basic liveability, often including roof replacements. To qualify for this kind of FHA loan, you will need to show that you spend less than 45% of your monthly income on debt repayment. If you need to borrow more than $7,500, you will need to back this loan with your home as collateral.

Remortgage Home

If you have equity in your home, you have the option to refinance your home with a new mortgage and receive a lump sum of cash for the value you already have in your home. There are no restrictions on what you do with this money, so you can spend the money on your new roof or any other project or investment you have in mind. 

The downsides to refinancing your home are the closing costs and the possibility of paying more interest in the long run than you would have on the original mortgage. 

Personal Loan

Check with credit unions and lending institutions to find out about personal loan rates. Rates on personal loans are usually higher than home equity loans because they are not backed by collateral. Expect to pay anywhere from 8% to 25% interest on a personal loan depending on your credit score. You will also need to show proof of income and other documentation for loan approval. 

Can I Pay for My Roof with a Credit Card? 

Many roofing companies accept payment via credit card. Credit cards generally have higher interest rates, so this is usually the least favorable option. If you choose to place your roof replacement on a credit card, look for a credit card with a low APR or a 0% introductory APR if you will be able to pay off the credit card during the promotional period.

Roof Replacement Financing FAQ’s

Yes, there are several options to finance a roof, including financing through your roofing company, a home equity loan, an FHA loan, or a personal loan. 

Yes, many roofing companies provide financing. At Castle Roofing Group, we provide excellent rates that are better than or competitive with personal loan rates.

Yes, when you finance your roof with Castle Roofing Group, you have the option to pay monthly for a new roof. As of February 2022, we offer 12 months no interest and 103 months at 9.99% interest, with financing plans of up to 12 years available.

The credit score needed to finance a roof depends on the type of financing. For an FHA 203(k) loan, you need a credit score of 500 or higher. With a credit score of 580 or higher, you can take advantage of the FHA’s 3.5% down offer. For private loans, the interest charged will vary based on your credit score, so you will need to check with each lender. Schedule an estimate with Castle Roofing Group to find out what credit score you will need for your roof replacement financing.

Roofing Companies Orlando

At Castle Roofing Group, we will help you navigate the roof replacement process and offer one of the best financing rates for roof replacements in the area. We are a trusted Orlando roofing company providing the highest quality roof replacements at a fair price. Contact us today for a free estimate online or at (407) 477-2823.

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