Your home is one of the most sizable investments that you will make in your lifetime. Depending on your situation, you could easily live in the same house for anywhere between five and twenty years. In addition, if you decide at some point to sell your home, if it has been well maintained, the return on your investment can be quite good.
So it pays to make sure that your home remains in good condition, and one of the easiest ways to do that is to make sure you have a great roof over your head. Depending on your needs, a new room can cost thousands of dollars, and quite a few homeowners need to get a bit of financing help to cover the cost.
If you want to finance your roof through a roofing contractor, there are a few options. Quite a few roofing contractors in your local area will offer financing options, and finding the right one for you just might take a little bit of research and leg work. Here are a few things to keep in mind before hiring a roofing contractor.
Who Will I be Working With?
It’s very rare for a roofing company to offer financing directly through their own company. Because of various insurance and bonding requirements that are needed to do so, most choose to partner with a local bank or credit union. And while there is absolutely nothing wrong with such a partnership, it is a good idea to make sure that their partner is someone that you’d like to work with. How long has the bank or credit union been in business? What is their customer service like? How flexible are they on their payment plans? While to roofing contractors will probably finish their job in a day or perhaps a few days, you will be dealing with the bank or credit union for at least a year or longer depending on the terms of the loan.
What are the Terms of the Loan?
In most cases, a new roof or a significant roof repair is financed through what is called a home improvement loan. In quite a few cases, roofing contractors will negotiate some pretty nice rates prior to the loan being implemented to try and “sweeten the deal” for a prospective clients. Basically the roofing company can get better rates simply because of the volume of loans they bring into the bank. It’s important to remember though, that the bank or credit union does have the final say on whether or not the loan is approved, and what the terms of the loan are. While most homeowners won’t have any issues in getting a favorable home improvement loan, factors such as previous financial difficulties, bankruptcy, or known criminal activity will often influence the decision of the financial institution.
Of course, a home improvement loan isn’t the only option offered by roofing contractors. On occasion a roofing contractor will be willing to offer a line of credit, either through the company or through a local bank or credit union. The main difference between this and a home loan is the style of payment options available, and the interest rate may be a bit higher overall then a personal loan. However, a line of credit does provide you with a bit more flexibility than a personal loan or home improvement loan. Often a line of credit is viewed somewhat like a credit card. Essentially you are asking for the roofing company to allow you to “pay” for the new roof with a line of credit, and you will make regular monthly installment payments with additional interest of course.
It’s important to remember that most roofing contractors can offer some flexibility when it comes to financing. It’s best to have a conversation with them about monthly payment amounts, interest rates, and other terms of the loan or line of credit. While they may not be inclined to make significant changes to their standardized terms, so may be able to work with you.
Precautions and Warning Signs
A typical roof will cost a homeowner an average of about $15,000 depending on the size, shape and complexity of the roof. In today’s market, most homeowners don’t have that type of money in their savings, so searching for financing options is a typical choice. But like anything else dealing with money, there are a few precautions and warning signs that a homeowner should watch out for.
First, if a roofing contractor approaches you with a great deal, complete with financing just after a big storm, high winds, or hail episode, be very wary. Often less then reputable companies will “chase storms” and prey on unsuspecting homeowners, offering them fantastic deals and financing with no up front costs, or even offering to pay your insurance deductible for you. As the old saying goes, if it’s too good to be true, it probably is. While a good roofing company might offer to work with your insurance agency to help mitigate the cost to you overall, anyone who promises you the moon for a penny should be viewed with suspicion.
Another potential warning sign to watch out for when financing a new roof is an interest rate that is abnormally low, or a roofing contractor that doesn’t want you to call the financial institution to verify their information. That’s a sure sign that they may not be as reputable as they appear. Both these are signs of someone who is most likely to take the money and leave town without doing a significant amount of the work.
Replacing a roof for most homeowners is a sizable investment, so it is a good idea to take the time and look closely at both at different roofing contractors, as well as the financing options that they provide. While financing isn’t the only thing to consider when choosing a roofing contractor, for most homeowners it can be a deciding factor. Therefore, be sure to explore all the options available to you with care.