Roof Financing: Loans For New Builds, Replacements And Repairs
As your primary shield against rain, wind and storms, your roof is an integral part of your home's structure, and keeping it in excellent condition should be one of your top priorities as a homeowner.
While replacing or even just repairing a roof can add up to being a costly project, there are plenty of roof financing options that can help you take care of your home without jeopardizing your finances.
How Much A Roof Costs
According to HomeAdvisor, the typical range for a roof replacement in 2021 is between $5,412 and $11,101, but you could end up paying a bit less or quite a bit more.
Why is the range so wide? Like most home improvement projects, there's no standard price you can expect to pay for a new roof. How much your replacement or repair costs will depend on a number of variables, such as:
- Roofing materials
- Structure and complexity
- Contractor rates
- Permit costs
- Disposal fees
- Additions desired
This can make it hard to estimate how much you need to finance, and most contractors won't be able to tell you what to expect until after they see what they're working with and give you an official estimate. When you receive this estimate, you'll likely get quoted a price per square, which is simply a 100-square foot section of roof.
Roof Financing Options
If you aren't prepared to pay thousands of dollars out of pocket for a new roof, don't worry. Many homeowners turn to financing options to get roof repairs done. Here are some frequently used options.
Before jumping into debt on your roof replacement, make sure you aren't covered by your insurance. There are some cases in which homeowner's insurance might cover at least part of your repairs, but you'll need to look through your coverage information or speak to a representative to figure out whether you'll be covered in your particular situation.
If your roof is suffering from natural wear and tear, insurance probably won't help you – but if you're trying to repair storm damage, there's a good chance you might get some assistance.
As with many other purchases, you can charge roof repairs to your credit card, but there can be disadvantages to this in the long run. Credit cards usually have significant interest rates and don't set up a reliable, fixed payment plan for you.
For a large cost like a new roof, they might not be the best option, as they often have lower borrowing limits than loans and can really add up your interest costs over time.
Home equity loans, HELOCs and cash-out refinancing are good options if you have equity built up in your home and are willing to cash it out to pay for your roof repairs. Home equity loans are typically good options when you need to take out a large sum of money and are looking for more flexibility with your repayment period and interest rate.
It's important to note, however, that home equity loans are secured, which means your home could be foreclosed on if you can't make your payments.
FHA And HUD Loans
The Federal Housing Administration (FHA) offers a few options for home improvement financing in conjunction with the Department of Housing and Urban Development (HUD). These include FHA 203(k) loans and Title I loans, and can work if you have a lower credit score and qualify to refinance your home with an FHA loan. You can learn more about these options on the HUD website.
Roofing companies and contractors often offer their own financing options for roof replacements and repairs. Sometimes these options are available directly from the roofer, but often you'll find that loans are offered via a third-party lender. Make sure you read the documentation you're provided with carefully and compare the rates and terms you're offered with other financing options.
A personal loan can be used for a wide variety of purposes, including roof replacement and many other home improvement projects. Personal loans are often a good option if you can't pay out of pocket and don't want to use home equity, because they usually offer more advantages than credit cards.
Benefits Of Financing Your Roof With A Personal Loan
Whether you need an entirely new roof or some repairs done, there's no shortage of financing options available to you. But how do you decide which is right for you? Here are a few reasons why a personal loan might be the best option for you.
Lower Interest Rates
If you're trying to decide between a personal loan and charging your roof replacement to a credit card, you'll want to carefully consider how the respective interest rates will affect your total costs. Credit cards typically have fairly high interest rates. For many borrowers – especially those with strong credit scores – a personal loan will cost less in the long run.
A personal loan is an unsecured loan, which means you won't risk losing an asset such as your home if you have repayment problems. This generally translates into higher interest rates and lower borrowing limits, but if you don't want to use home equity for your roof repair, you'll usually still fare better on these scores with a personal loan than you would with a credit card, which is also unsecured.
With personal loans, especially when taken from an online lender, you'll receive your funds after a matter of a few days. In some cases, you might even get same- or next-day approval. It's better to address problems with your roof sooner than later, so if you're getting anxious about damage to your roof, a personal loan could help you get the ball rolling faster on your repair.
A Clear End Date
One of the biggest advantages of a personal loan is that it comes with a clear repayment plan. Credit card debt doesn't come with this perk. Instead, it can snowball and create more financial headaches for you. This is especially important when considering a major purchase like a new roof. With a personal loan, you'll know how much you owe and when you can expect to have it paid off.
How To Get A Roof Loan
If a personal loan sounds like the best route for you, here's what you need to do to get the process started.
Check Your Insurance Policy
As mentioned earlier, there are some situations in which your insurer might be able to help you cover the costs of your roof repair. If your roof was damaged during an accident, for example, insurance could very well cover your repair. If you aren't covered at all or need to cover the rest of the funds yourself, you can turn to a roof loan to make up the difference.
Ask For Estimates
A roof is a major purchase, so make sure you shop around before settling with a contractor or roofing company. As you now know, roofing costs can vary wildly, so it's important to consult a few different companies to get a good idea of how much you can expect to pay and who can offer the best deal when it comes to quality and price of labor. You'll also want to see how the prices for materials varies between roofers.
Choose A Lender
If you're going to use a loan to finance your new roof, you should vet your potential lenders the same way you did with your potential contractors. There are many lenders out there who offer personal loans. Compare rates and terms and see who can best accommodate your specific qualifications, keeping credit score, debt-to-income ratio and other qualifiers in mind.
Final Thoughts: Don't Put Off Your Roof Repair
Replacing your roof may feel daunting, but there are few projects that are more important to the integrity of your house. By reviewing your options and taking action as soon as you notice a problem with your roof, you can save on repairs further down the road and ensure you and your family stay safe, sound and protected from the elements.
Table of Contents
Remodeling Ideas For Small Homes
With tiny or mobile homes increasing in popularity, many wonder how to keep a house "homey" vs. "cluttered." To help, read our guide on small homes and making the most of a confined space.