Roof Repair Financing
If you are here and reading this article right now, the odds are you are wondering what options are available to fund a new roof?
You can cut costs by using cheaper materials and the like but the long-term costs will often outweigh those short-term savings. With roofing, it is important NOT to cut costs on quality; or you will pay for it in years to come.
While it’s always best to plan carefully for a major project like this, sometimes the need for roof replacement occurs suddenly and unexpectedly, which can lead to financial hardship.
There are several reasons that you may be considering repairing a roof.
- Planning to restore or replace the roof due to age and deterioration.
- Discovery of a leak which could mean further damage if not fixed quickly.
- A storm has ripped off part of the roof or brought a tree down on top of it.
Roof repairs should be dealt with quickly. Failure to do so will lead to more problems that could end up being very expensive to resolve.
Most people can not afford the cost of a new roof upfront
Years of neglect or a sudden unexpected weather event can make roof repairs needed. It’s a huge ask to restore or build a roof for majority of families. Most families do not have lots of money just sitting there. Quite often a replacement roof is an urgent necessity and a big unexpected expense. Without a roof over your heads, your home contents, your family, and your largest asset your home are exposed to the elements.
Once you decide that the roof needs attention, then you must calculate which finance option will be the best for your situation.
Getting the funds together to cover the costs can be stressful. The good news is there are several financing options available. The rates and terms of these options vary. The best deal for you will depend on several factors, such as your budget, credit, income, and personal preferences. We will cover each one, their positives and negatives, and who might want to consider them.
How will you pay for your new roof?
Replacing a roof is an important investment. When a replacement roof can not be deferred any longer financing is one way to get the roof you need now.
Let’s have a look at the most common financing options to help you choose one that’s right for you. Before looking into any financing options, look at your financial situation, credit history, income and available cash. That way, you will have a better idea of which option might better suit your situation.
- Savings/Cash – Using savings is an easy and fast way to invest in your roof repair. Start saving money every month towards the future cost of replacing or repairing the roof if you think you may require a new roof in the coming years. When you organise the roof repairs you can pay the invoice with cash and not have any hassles and fees that are often associated with finance options. By paying cash, you don’t need to have good credit and you won’t have to pay any interest. Make sure you do not use cash if it was specifically put aside for another purpose. On the downside, not all homeowners have a significant amount of cash readily available for the more expensive home improvements.
- Line of Credit/Redraw Facility – many mortgages now have the option to redraw on your mortgage if you are ahead in payments. Meaning you could use the equity in your home loan to pay a lower interest rate. The flexibility offered with line of credit (home equity) may be a good solution to make the repairs to the property that you need. It is often good to start with your current mortgage lender. If you have the ample equity in the home, this may be a good option to complete the roof repairs.
- Personal Loan – If there is not enough equity to be approved for a line of credit on your home, a personal loan could be a good option for you. Some lenders have restrictions, but typically you can use a personal loan for just about any expense (including roof financing). There are usually no pre-payment penalties and you pay a fixed amount each period, which will make budgeting easier. The paperwork is fast and sometimes funds can be received as early as the same day. The disadvantage is that with a bad credit rating, some lenders can charge high interest rates.
- Credit Card –While paying for your roof replacement via credit card sounds like a bad idea, it is possible to pay it off interest-free if you are eligible for a 0% promotion credit card. To be approved you will need a good credit rating. Pay the roof repair invoice on the 0% card, do not use that card for any other purchases until the balance is fully paid. Break the cost into monthly payments to avoid paying interest. The risk with credit card option is not paying the total balance off in the twelve months and getting caught with interest payments. Budget carefully and you should be able to avoid this. Another disadvantage is there is no guarantee the limit will be enough to cover the roofing cost, so there is a possibility that you will also need another finance option to cover the difference in the roof repair costs.
- Home Equity Loan – uses your property (house) as collateral. It is also called a second mortgage. This type of loan usually has interest rates lower than personal loans or credit cards. The interest paid may be able to be deducted at tax time from the amount of taxable income. Using the home as a guarantee can be a perilous move. You should only consider this option if you have confidence in your income source and will not default on payments and lose your home.
- Homeowner’s Building Insurance – Before exploring other finance options, be sure to look over your building insurance policy to check if roof repairs would be covered. It will only be applicable when the damage to the roof is caused by natural disaster or another insured event, not just neglect or wear and tear. Many insurance companies deal directly with roofing companies, this makes it less stressful on your part in organising the repairs.
A total roof replacement, extensive repairs or restoration can be overwhelming considering the cost of labour and materials. There are finance options that will help to pay the repairs off over time – roofing company finance, loans or your building insurance. You can use your savings towards the home repairs and improvements.
Before you make your decision on how to best finance your roof, consider carefully your budget. In addition to the roofing costs, consider the interest rates and repayment terms of the loans.
If you would like to discuss how to finance your roof (and you live in Brisbane north to the Sunshine Coast or Brisbane South to Logan and Brisbane Bayside or Redlands) contact us at Bayside Roofing for all your repair, restoration and roof painting needs. We also have a roof maintenance service so we can check your roof on a regular basis.