As the only truly tropical region of the continental United States, southern Florida is famous for its ideal winters and stormy summers. While the weather is perfect for tourists looking for a stay at the beach, the frequent storms and extreme humidity take a major toll on the city’s buildings and infrastructure.
As a building’s first line of defense against the elements, your home’s roof takes the largest beating from inclement weather. Homeowners and property owners need to be consistently vigilant for any signs of damage to their roofs, as a quick repair are essential for avoiding a much costlier problem down the line.
However, simple fixes will no longer suffice after a certain number of years. Every roof has a useful lifespan, whether it be ten years or forty, and will eventually need to be replaced.
Roof replacements are costly and well beyond the range of the typical homeowner’s ability to pay out of pocket. Thankfully, financing options exist that make costs more manageable. Each option has pros and cons, and homeowners should carefully weigh their options before choosing the path that best fits their unique needs.
Personal Loans And Lines Of Credit
The quickest and easiest way to fund a roof replacement for your Miami home is through personal financing, including personal loans and credit cards. Compared to other types of financing, personal lines of credit have a high approval rate and almost no approval process. However, these options are likely only available to homeowners with good credit histories and larger lines of credit, limiting who can take advantage of them.
Personal finance options also have significant drawbacks regarding the total money spent on repairs. For example, credit card APRs are often double-digit percentages over other types of loans and can change year over year.
Personal loans also have a higher interest rate and a shorter payment term than other financing options. Unless the homeowner is confident in their ability to repay the loan quickly, alternatives like home equity loans may prove a better fit.
Home Equity Loans And HELOCs
Home equity loans allow homeowners to borrow against the equity they have built up in their homes since purchasing them, putting the money towards expensive renovation and repair projects. Home equity loans provide a fixed-rate loan that has a lower interest rate and a longer term than what you could get from personal loans.
HELOCs, or home equity lines of credit, are credit lines that use your home’s equity as collateral. They allow you to turn your home equity into cash and only require payments on the balance owed. HELOCs allow for interest-only payments for a select period at the start of the loan, a major benefit for homeowners experiencing temporary cash flow problems.
Both home equity loans and HELOCs depend on the home being used as collateral to guarantee the loan. This means both options have the same primary drawback: if you default, you risk losing your home.
Roof Contractor Options
Some roof contractors offer financing options that partially or fully cover the replacement costs. Options vary depending on the lender the roofer is working with, but they come with some significant perks for the homeowner.
The relationship between the roofing contractor and the lender waives the usual transaction fees. The loan is “pre-built” for the project, meaning there will be no unexpected costs resulting from misalignment with the contractor’s estimate. The approval process is much quicker and easier than other loans, often requiring a single phone call.
For any homeowner considering working with a contractor for financing, they should be very thorough when reading the fine print of the agreement. More unscrupulous contractors may include a significant dealer’s fee that will add 10% or more to the final cost. Some lender APRs may also end up similar to credit cards, leading to a higher final cost.
Final Roof Financing Notes
Determining which financing option for you requires a detailed assessment of your budget, credit score, and the total cost of the roofing project. This means getting an accurate estimate from a trusted contractor that will not be continually adjusted higher as the project progresses.
For best results, it’s recommended that homeowners “shop around” and get proposals from three to four different lenders. Compare their proposals, with special attention paid to interest rates, loan terms, fee structures, and the total cost of borrowing. Some lenders associated with contractors may even offer special promotions or discounts that will reduce the total borrowing cost.
A&E Brothers Roofing offers homeowners free and accurate estimates on their roof replacements that can be used when negotiating a loan from lenders. The A&E Crew will work closely with your lender, making sure that the loan is in-line with expectations and ensuring unexpected costs won’t pop up as work progresses. Call today!