Usually, when you need a new roof, you need it right away, even if you aren't sure where the money for one is going to come from. Fortunately, if you can't afford to wait for a new roof, there are plenty of roof financing options that can help you get the roof you need right away.
 
 

Insurance Coverage

Before you worry about any type of financing for your new roof, you want to check with your homeowner's insurance company first to determine if at least a portion of the costs will be covered. In most cases, if your roof was damaged by a covered peril (hail storm, fire, vandalism, etc.), you will only be required to pay your deductible, and the insurance company will cover the rest according to your policy.
 
Once you find out if your insurance company is going to cover some of the costs, then you can start to worry about how you're going to pay for your portion. Typically, you will have a deductible to pay, which can range from $250.00 to $10,000, or even more, depending on how you set your policy up. Obviously, the lower your deductible, the less likely it will be that you'll have to finance your part of the new roof costs. Check out our Insurance FAQ page.

Roofing Company Financing

Our roof financing options will get you the money you need for your roof in a timely manner. We are experts and realize that the cost of replacing a roof is beyond the means of most people to pay in cash, so we offer competitive financing options. You'll find lower interest rates, around 10 - 11%, depending on your credit score, financed for about 10 years with no prepayment penalties! We can qualify just about anyone!
 
Financing your roof through your roofing company can be beneficial if you don't have a lot of equity in your home yet, or if you're having trouble qualifying for a personal loan. You'll get a loan term of between 10 and 15 years, which is better than most personal loans, which require full repayment in a shorter amount of time. Just make sure that the payments you'll have to make are within your budget, typically about $100 - $200 per month.

Personal Loan

A personal loan is an unsecured loan from a bank or other financial institution that you can use for any purpose, including for getting a new roof. There are quite a few benefits for using a personal loan to finance your roof, including the fact that you do not have to put up any collateral to get one, they can typically be approved quickly, and they have lower rates than other financing options, such as credit cards.
 
However, it's important to know that personal loans will often have higher interest rates than home equity loans or home equity lines of credit. Additionally, you cannot claim the interest you pay on a personal loan on your taxes, which can be a perk with other payment methods. Still, if you have good credit, personal loans are an excellent option for roof financing, especially if you need a loan fast. Be sure to research rates and terms with various lenders.
 
 

Home Equity Loan

Home equity loans use the equity in your home to pay for your roof. Equity is essentially the amount your house is worth minus what you owe on it. To get a home equity loan, you typically need to have about 20% equity, which may be difficult if you have just purchased your house. Additionally, this type of loan can take longer to finalize because you will need to get your house appraised before a lender will qualify you.
 
There are some benefits to using a home equity loan to get your new roof, though. For example, the term will usually be longer than that for a personal loan and you may have as long as 20 years to repay the amount you borrow. You should know that when you use a home equity loan, you are putting up your house as collateral, so if you fail to make timely payments, your house could be at risk.
 
 
 

Home Equity Line of Credit

A home equity line of credit or HELOC is another form of a home equity loan, but instead of requiring an application at the time you're taking out the loan, a HELOC is an amount of credit you have available when you need it. The lender places a credit limit based on the amount of equity you have available in your home. Then, you can use this line of credit as you need it, only repaying the amount you use.
 
As with a traditional home equity loan, you are putting up your house as collateral, so it's imperative that you make your payments on time, but interest rates on a HELOC can be significantly lower than those for a personal loan. If you already have a HELOC available to you, there won't be a delay in approving your loan, which is another benefit, if you need money for your roof quickly. Interest on a HELOC may also be tax-deductible.
 
 
 

Credit Cards

While credit cards may not be the best option for financing a roof, they are an option and one that is usually readily available when you need to finance something quickly. If you know that you'll be able to pay off your balance in a year or less, you may consider opening a new credit card that offers an introductory rate of 0% interest. This will allow you to pay for your roof without paying any interest at all.
 
Of course, credit cards vary greatly in terms and interest rates, so be very careful with this type of financing. To get a 0% introductory rate, you'll have to have excellent credit. If your credit is not great, you may end up with an interest rate that will make the roof much more expensive than it needs to be. Moreover, if you miss a payment on a 0% introductory rate, your terms will usually revert to a standard interest rate.
 
 
 

Government Loans

The federal government offers two different types of home improvement loans that can help people with lower credit scores (about 500) obtain financing for home improvement projects like getting a new roof. FHA 203(k) standard loans require a minimum loan amount of $5,000 and involve obtaining a mortgage refinance that rolls the amount of the roof replacement into your new mortgage loan amount. The money you borrow must be used for your roof or another covered home improvement project.
 
FHA Title I loans are a more traditional type of financing, but also must be used for home improvements, which the HUD says are anything that makes your house more usable and livable. The first $7,500 is unsecured, but any amount over that and up to the maximum of $25,000 is secured by a mortgage on the property. To qualify, your debt-to-income ratio must be 45% or less, and the maximum loan term is 20 years on a single-family home.
 
 

Other Considerations

The amount you finance is likely the biggest factor in the type of financing you get. For example, if you only need to finance a small amount to meet your deductible, a credit card might make the most sense. However, if you have a larger amount to finance, which is the case for most people who have to have their roof replaced, one of the other options with longer terms and lower interest rates is a better choice.
 
The cost of your roof is dependent on the condition it's in, the size of your roof, and the time of year in which you're getting it replaced. For instance, if you need it replaced in the winter, it's probably going to be more expensive. Before deciding which type of financing you're going to secure, get an estimated quote for your roof. This will help you determine which financing option is going to give you the best deal over time.

Choosing Your Finance Option

Choosing your option for financing can seem complicated, but if you consider what is most important to you and the financing options you will qualify for, you can eliminate the choices that don't make sense for you. If you need to get financed quickly, skip the home equity options and the FHA 203(k) standard loan because they're going to require appraisals and underwriting time. Personal loans, credit cards, and roof company financing are much quicker in terms of approval.
 
If your credit score is a problem, then you either want to go through the government for a FHA 203(k) standard loan or through your roof company, which can get you qualified quickly at a decent interest rate. For borrowers who need a loan quickly and have a low credit score, your roofing company is clearly the best option, as you'll likely be approved at a fair interest rate more quickly than just about any other option.
 
Getting a new roof is not something you can put off for very long, especially if it's already leaking or falling apart. Luckily, there are numerous financing options available to you, no matter what your credit score is or how quickly you need financing. Call Austin Roofing And Construction and we'll get the process underway for your new roof!