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How To Finance A Roofing Project In Houston

By on Mar 26, 2017
How To Finance A Roofing Project In Houston

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If you’ve been following our ongoing series: The Texas Roofing Chronicles, you know how to find Texas roofing companies in various cities, what you need to look for in said companies and what to ask your new roofing contractor. We’ve pointed out how much you could expect to pay for a roofing project, but you may be wondering how you’re going to pay for it. Luckily for you, there are various financing options available to ensure you can keep a roof over your head without costing an arm and a leg. Here’s how to finance a roof project in Houston.

If you’re ahead of the game and know how you’ll be paying for your roofing project, you can find your ideal roofing contractor here.

Financing Through A Roofing Company

Due to the pricy nature of major roofing renovations, many Houston and other Texas-based roofing companies offer financing themselves. This could be as simple as a monthly payment based on the cost of the roofing project. Also, the length of the loan can affect the monthly payments, but the overall cost of the project could be higher due to interest payments.

For example, a short term loan (usually paid off within two years) could calculate a monthly payment of 1% of the project cost plus 5.9% interest. So, a $10,000 roofing project would have a $100 minimum principle monthly payment plus $5.90 in interest. Obviously, this payment plan would take more than two years to pay off the loan, so usually the interest rate would increase after a certain amount of time to encourage a borrower to make higher monthly payments. Also obviously, your roofing project’s cost and financing rates may vary.

A long term loan would feature a higher monthly payment and interest rate but have a set period of time to pay off the loan. If you prefer consistency in payments, this option would be a better choice for you. To attract companies, roofing companies that offer financing tend to have multiple options to entice potential customers.

Modern Green Roof

Cash-Out Mortgage Refinancing

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Since having a roof is pretty much an imperative for your home, financing a roof repair project is a necessary expense. If you’re paying off a mortgage, additional funds may be hard to come by so you can use Cash-Out Mortgage Refinancing as a way of financing a new roof.

While you’ve been paying off your mortgage, you’ve been building up your home’s equity. While it may look like your monthly payments are staying the same over time (hopefully), you’re probably paying less in principal and more in interest. Therefore, the principal you’ve already paid off will allow you to essentially redo your mortgage and take out cash as the difference.

For example, if you owe $50,000 on a $100,000 house and owe $10,000 for a major roof repair, you can refinance your mortgage to $110,000. Your mortgage provider will simply give you $10,000 for the repair and you continue to pay off your mortgage at the higher total amount. This will sacrifice some of your home’s current equity, but allows you to use your mortgage to access emergency cash. However, if interest rates have risen (like they have in 2017), then this option might end up costing you more in the long run. There are other options for roofing financing available.

Home Equity Loans & HELOC

Instead of refinancing your mortgage, you can also opt for a home equity loan where you take out a second loan on top of your existing mortgage at a different rate. This is ideal if you don’t want to refinance your mortgage to a potentially higher rate and if you can afford additional monthly payments.

Similar to a Home Equity Loan is a Home Equity Line of Credit (HELOC). A HELOC is a revolving line of credit which allows you to borrow cash up to a limit whenever you need it. This is similar to a credit card in the sense that there is a credit limit based upon the value of your home and a minimum monthly payment.

While both loan types have their advantages and disadvantages (you can learn more here), they’re both great alternatives to pay for a new roof.

Conclusion

Having to fix or replace a roof may be a major pain, but luckily you have several options to ease the hurt to your wallet. Hopefully, you now know your financing options, and that’s half the battle.

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