Roof Financing Options for Homeowners

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Author: Linda Light | July 6, 2023

According to HomeAdvisor, the average homeowner could spend anywhere from around $5,000 to $13,000 to install a new roof, with an average cost of about $9,000. If it's time to replace or repair your home's roof, you may be thinking, "How will I pay for it? Are there roof financing options to help?"

Smiling couple working on a budget with papers and laptop
Financing your roofing project doesn't have to be difficult if you're aware of your options.

The good news is that there are several options to pay for your roof when cash may not be readily available.

Personal, Home Equity and Title I Loans

A personal loan can be a good option when you have little equity built up in your home or when you need the funds to be available quickly. Personal loans can sometimes be approved in as little as 24 hours, typically require no collateral and have a set interest rate with no prepayment penalties.

This makes them a good option when you need a new roof or a major roof repair immediately, like after an extreme storm. However, be aware that personal loans also tend to have shorter loan terms, higher interest rates and higher payments.

When you have a roof replacement or major repair that you're able to plan for, a home equity loan is a cost-effective solution. You can use the equity you've built up in your home as collateral and borrow up to around 85 percent of that amount. Since it's a secured loan, you can generally qualify for lower interest rates. You may even be able to qualify for tax deductions, but be sure to talk with a tax advisor first. The biggest risk for this option is that if you default on the loan, you could lose your home.

Title 1 loans are an option you may not be aware of. The Title I program, run by the Federal Housing Authority (FHA) and offered by many banks and credit unions, covers fixed-rate loans used for home improvements and repairs that improve your home's livability and utility. There are limits to what can be borrowed and each lender will have its own terms and conditions, but Title I loans tend to have less stringent qualifying requirements than conventional home improvement loans. Loans under $7,500 are typically unsecured; anything over that must be secured using your home as collateral.

Credit Cards and Insurance

If you plan to use a credit card, the best option is to obtain a 0 percent APR card, where there's no interest for some period of time. This is a good option when you have less expensive repairs such as fixing broken shingles or flashing around your chimney. Just make sure your interest rates aren't too high if the 0 percent interest period isn't long enough to pay off the entire project.

Before you sign up for another credit card, check your homeowner's insurance policy. Many policies cover roof work when damage is caused by a storm, fire and even theft. Typically, policies don't cover repairs or replacements due to age or lack of maintenance.

Roofing Company Finance and Payment Plans

Many roofing contractors offer roof financing programs through a distributor or finance company. These programs make it extremely easy for a homeowner to obtain approval quickly, which is great if you have emergency repairs.

Programs such as Beacon's Homeowner Financing tend to be very flexible and customizable, making them great for larger projects:

  • No home equity required.
  • Repayment terms up to 20 years.
  • Payments that fit your budget.
  • Options for customers with credit challenges.

Choosing the right roof financing plan will depend on your project's size, timeline and budget, as well as your home equity, income, credit profile and personal preferences. Take the time to compare your options in order to find the one that works best for your situation.

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