It is natural to want to pay a roofing company for roof installation as soon as possible. But how can you do that? There are many ways, and they all have their advantages and disadvantages. This blog post will discuss the best ways of paying your roofing company so that you can decide what method is best for your roof installation.
7 Payment Methods For Your New Roof Project
Payments for residential roof replacement and roof repair can be handled in various ways, each with benefits and drawbacks for both the homeowner (buyer) and the roofing contractor (seller).
The following variables will determine which choice is best for you and your property:
- The quantity of money you have in your bank account
- To save money, how many hoop leaps are you willing to do?
- Annual income
- Credit rating (whether you have good credit or bad credit)
- Whether a huge storm has damaged your home’s roof,
We’ll go over each of your options in detail below.
Cash or Check (Easiest Method)
The quickest and most convenient method of completing the assignment is to pay in full with cash! Not everyone, however, has the financial means to pay for a new roof in cash (or by check). You may not want to pay for the job in full even if you have the cash on hand.
What makes this method so simple? First, there is no lengthy paperwork or approval process to deal with aside from the contract with your selected licensed roofing contractors to complete the service. Only a deposit is required, and the full funds will be transferred once the entire roof has been installed.
Why do roofing services require a deposit? Because deposits ensure that everyone is on the same page and committed to the project. If a contractor does not have a deposit, they risk acquiring goods, spending time planning, and then having the homeowner back out at the last minute. Though it isn’t common, it is a considerable drain on both large and small contractors’ resources.
Credit Card
Is it feasible to charge a new roof’s cost to a credit card? To put it bluntly, yes.
If you have a credit card with many benefits and incentives, especially cash-back offers, using it to pay for your new roof can be a good idea. For example, if you get a new credit card with 0% interest for a year, you can put the entire project on it and pay it off over the next year.
High-interest rates are a huge deterrent to using your credit card for roofing if you don’t have a “no interest” deal. In addition, you’ll save more money over time if you have other financing options (such as a home equity loan) than if you use a credit card with a higher interest rate.
Another disadvantage of paying with a credit card is that the local roofing company will charge you a processing fee when your payment is received. Depending on the card you’re using, transaction fees might range from 3% to 5%, which can rapidly mount up when you’re talking about a $10,000 buy. As a result, almost every roofer who accepts credit cards will pass these charges on to the buyer if they pick this method. Nevertheless, using a credit card to fund your roof or other significant home repair job may still be the best option if your credit card’s advantages and incentives are good enough!
Personal Loan
Is a personal loan for roofing, vinyl windows, or other home improvement tasks possible?
Depending on loan approval conditions that change from lender to lender, you may be able to use a personal loan to cover your roofing project. The most common funding source for a personal loan is a bank or financial institution, such as Bank of America, Chase Bank, Wells Fargo, or a local bank in your neighborhood.
If you go this route, you’ll want to shop around to save the most money in the long run. Before looking for a lender, consider which characteristics are most important to you. Varying creditors will charge varied interest rates and have different repayment terms, so think about which factors are most important to you before looking for a lender. The loan length and interest rate are the two most crucial factors to consider when considering a personal loan.
Some loans, for example, may be for a short period (2-6 years), while others may be for a longer period (15 years or more). Depending on your credit score, income, and the lender’s estimate of your trustworthiness, interest rates could range from under 5% to over 20%.
Home Equity Loan
A real estate mortgage concept is represented by small plastic home models layered on top of coins.
According to the Federal Trade Commission, a home equity loan is a “loan for a fixed amount of money secured by your property.” These loans are repaid in the same way as a mortgage, with fixed payments made over a certain time. For example, for ten years, you may pay $99 every month.
House equity loans are a fantastic alternative if you have equity in your home and want a non-variable and predictable payment schedule. This type of financing is popular among homeowners since the interest rates are often lower than personal loans or loans obtained through a roofing company. It won’t be all rainbows and sunshine, though. There are a lot of disadvantages to this type of funding.
The most important downside of a home equity loan is that the lender can seize on your house if you fail to make payments (or ‘default’ on loan). This is because your home is used as collateral for the loan. Most lenders require great credit scores and consistent income to qualify for a home equity loan. If this sounds like you, we suggest you look into it.
If you want to quickly figure out how much money you might be able to acquire through a home equity loan, use this formula to calculate your potential equity:
- Find out how much your home is currently worth.
- Subtract your mortgage’s remaining balance.
- To get the total, multiply the difference by.85.
According to the law, you can only borrow 85 percent of your available home equity, so if your house is worth $400,000 and you owe $350,000, you can only borrow $50,000. So you now have $42,500 in potential home equity by multiplying $50,000 by 0.85 (to get to 85 percent).
As you can see, a home equity loan might provide you with a substantial sum of money. However, if you believe this is a viable choice for you, inquire about current interest rates and availability with your bank or preferred lender.
Insurance Coverage
One of the most difficult and time-consuming ways to pay for a new roof is to file an insurance claim.
If the cause of the flat roof damage is obvious, it may be a little easier. For example, consider the consequences if a tree were to fall through your roof. In this case, we recommend that you do everything possible to guarantee that your insurance company pays for the repair or replacement. In less obvious situations, however, obtaining assistance from your homeowner’s insurance carrier can be challenging.
Because most homeowner insurance policies do not cover “wear and tear” on any part of your home’s exterior, insurance claims for roofs that have deteriorated over time are impossible to obtain. As a result, insurance companies (such as Geico, Allstate, or Metlife) will usually deny your claim owing to the roof’s age or lack of upkeep in these situations.
If you suspect your roofing project may be covered by insurance, we recommend speaking with your insurance agent directly to discuss a potential claim. Keep in mind that if your argument isn’t convincing, you’ll almost certainly be denied.
Roof Company Financing
If you don’t have enough cash on hand or any equity in your home to invest toward a new roof, you might choose to work with a roofing and siding contractor who offers to finance.
Because most homeowners prefer not to pay cash for large home improvements, certain established roofing companies can help by financing directly or through a third-party financing vendor. Because most of the processes are handled in-house, this process is far more straightforward and straightforward than home equity and personal loans.
Another benefit that most people neglect is that a roofing company that can aid you with financing is significantly more respectable than one that does not. It means they have a good relationship with their lenders, and you can trust them to do a great job replacing your roof!
Government Funded Home Improvement Loan
Do you want the government of the United States to pay for your roof? Although it may appear to be a pipe dream, you may qualify for an FHA Title I Property Improvement Loan if you own a single-family home.
The Department of Housing and Urban Development offers these loans through pre-approved lenders, and there are a few prerequisites to meet to qualify. A single-family dwelling or one of the other types of properties that have been occupied for at least 90 days qualifies.
According to HUD, the loan must “significantly safeguard or improve the property’s essential livability or usability,” as well as “be used in conjunction with a 203(k) Rehabilitation Mortgage.”
There are no prepayment penalties on these loans.
How Should I Pay For My New Roof?
Making a decision is ultimately up to you.
If you have enough money in your bank account to pay for the job in full, we recommend paying cash. It’ll be the most straightforward way, and once performed, it’ll be finished.
If you have sufficient equity in your home and can obtain a home equity loan from a reputable lender, this is one of the most cost-effective options if you don’t mind using your home as collateral.
If neither of the options above suits you, talk to the best roofing company that offered you the best quote about financing directly with them.
Whichever option you choose, know that TCI Bronx is here to assist you in your roofing needs and ensure completing the work correctly on your roofing system. We have a lot of experience with homeowners who utilize any of the seven payment methods listed above, and we’d love to earn your business as well. So contact us today to get started on a free roofing estimate and roof inspection!
