Are you worried about affording a new roof in Seattle’s rising-cost housing market? Feeling overwhelmed by all the financing program options and unsure which one is a good match for you?
At RoofSmart, we have helped hundreds of homeowners find the right payment plan for their new roofs. And, after being based in the Seattle area for 13 years and watching the cost of living increase continuously during that time, we understand how expensive it can be to get a new roof.
Though we offer financing options for our customers, we believe that you deserve to know about the other types of financing whether you choose to finance through your roofing company or through a program that you find on your own.
This article will pose several scenarios related to financing and assess how each financing option would address your needs in that situation. Each scenario will have a winner, which will be the financing program that works best in that scenario. In this article, we’ll compare the most common financing options—helping you choose the one that fits your budget and timeline.
Is financing the best way to pay for my new roof?
If you’re in a tough financial situation and need a new roof, it can be difficult to figure out the best way forward. We understand that paying for an entire roofing project upfront is not realistic for a lot of people.
With Seattle’s home prices and cost of living among the highest in the country, financing a new roof wisely is crucial.
That’s why we (and many other roofing companies) offer financing as a payment option. Financing can be beneficial because it helps you pay for a project that needs to happen right now by spreading out the payments.
For example, if you have a leak on your roof but you won’t have the money to pay for it until next summer, you might be tempted to wait until then to fix it. In that type of situation, you’d want to consider the added expense and hassle of waiting. If you leave a leak unattended, it will continuously get worse. You risk developing rotting wood and mold in your roof, both of which are expensive issues to fix.
In the Pacific Northwest, wet weather can cause roof damage quickly. Financing allows Seattle homeowners to replace their roofs before heavy rains cause major problems.
The benefit of financing is that it makes it feasible to pay for a big project like that. You can contribute in smaller increments over time so that you don’t end up having to pay even more for further damage down the road.
Wondering how much a roof replacement would cost? Use our Instant Estimator tool to find out:
What are some financing options you can choose from?
When it comes to financing, there are many different options to choose from. This article will focus on a few common options that you can access through your roofing contractor or find on your own. Each one has its own pros and cons.
These are not the only options out there, but they are among the most common ones that we have seen customers use throughout the years. Not every financing program will be right for your needs, so it’s important to consider all your options and see which one is the best fit for your situation.
What financing options do roofing contractors offer?
- 0% interest for a period of time: This program is pretty much entirely spelled out in its name. You won’t have any interest charges at the beginning, but after a designated amount of time, it will kick in. You will be expected to make payments every month for a pre-determined period of time.
- Long-term financing: Another option is to choose a longer program that has a consistent interest rate throughout. Just like the previous option, you will make regular payments towards the loan for a certain amount of time.
What financing options can I find through an independent financial service?
- Home equity loan or home equity line of credit (HELOC): This type of loan allows you to take advantage of your home’s equity by using it to borrow either one lump sum or establish a line of credit that can be paid off and used multiple times. Seattle homeowners with high home equity might qualify for a better HELOC rate than homeowners in lower-cost cities.
- Signature loan: This is a type of personal loan that does not require the use of collateral. Instead, after having your financial history vetted and approved, you sign off on the loan as a form of assurance that you’ll pay it.
Which roof financing option offers the fastest approval?
Tie- 0% interest for a period of time and long-term financing
Here’s how each financing program works in this situation:
- 0% interest for a period of time: This might vary depending on which lenders your roofing contractor works with, but this type of program usually has a pretty quick approval process. You provide your credit history and debt-to-income ratio and you’ll know within minutes if you’re approved.
- Long-term financing: This type of loan also can have a quick approval process if you are doing it through your roofing contractor. You just provide your credit history and debt-to-income ratio and you’ll know within minutes if you’re approved.
- Home equity loan or home equity line of credit (HELOC): Both of these programs are basically like taking out a second mortgage on your house. So, the approval process might take a while to ensure that you are in good standing.
- Signature loan: Because this type of loan is not backed by any collateral, you’re relying entirely on your financial history to get approved. Out of all the options in this article, this one will likely take the longest to get approval on.
Why 0% interest and long-term financing are tied: Whether you’re in a time crunch or you just want an easier and quicker approval process, financing through your roofing contractor is a good option.
Depending on the programs they offer, they can usually get you approved quicker than if you chose to find your own financing program to use.
Which roof financing option is best if I expect more money later but need to keep costs low until then?
Winner- 0% interest for a period of time
Here’s how each financing program works in this situation:
- 0% interest for a period of time: If you know you’ll be tight on money when you start your financing program, choosing a program with 0% interest for a period of time can be extremely helpful for keeping costs down. Then, once you have more money, you’ll be prepared for when the interest rates kick in.
- Long-term financing: Though a longer program means that you’ll be paying off your debt for a while, the month-to-month financial benefit is that your interest rate will be lower when you’re tight on money. But, once your money comes in, you’ll still be bound to the long-term payment plan.
- Home equity loan or home equity line of credit (HELOC): With both of these programs, you’ll have a set payment plan with the expectation that you’ll be making your allotted payments every month. The interest rates and monthly payment amounts on the HELOC can vary, but the home equity loan will have fixed interest rates and monthly payments. Either way, the interest rates will likely be high the entire time and you won’t have much flexibility with payment amounts without risking falling behind and losing your home.
- Signature loan: Unfortunately, this type of loan is not good for keeping your costs down. Interest rates on these types of loans are pretty high since you are not providing collateral and this is just a personal loan. However, if you choose a loan with high interest, you might pay thousands more over time.
Why we chose 0% interest as the winner: A 0% interest program can be extremely helpful for you if you need to get your roofing project done right away but you won’t have access to extra funds for a while.
Can I finance my roof without putting up collateral?
Winner- Signature loan
Here’s how each financing program works in this situation:
- 0% interest for a period of time: Depending on the program, there might be a UCC 2 lien placed on your home. This means that if you fall behind on payments the financial institution running the loan program might be able to take your house as collateral. But this isn’t always the case—check with your roofing company to see if UCC 2 liens are included in their financing programs.
- Long-term financing: Just like with the 0% loan above, you might have a UCC 2 lien placed on your home. It’s not a 100% guarantee, but you should ask your roofing contractor if it’s a possibility just in case.
- Home equity loan or home equity line of credit (HELOC): Both of these loans require you to put up your home as collateral, so they’re not a good option if you’re trying to avoid that. Also, if you can’t keep up with the payments, you might lose your home.
- Signature loan: This specific type of personal loan does not require collateral. All you do is fill out the application to get approved and then sign off on the loan as assurance that you’ll pay it off.
Why we chose signature loans as the winner: Providing collateral can be a helpful way to get approved for a loan and potentially lower your interest rates. But, if you fall behind on payments and default, then you’ll likely lose whatever you put up as collateral.
To avoid this, you can look for a program that does not require collateral, like a signature loan.
Your Final Decision On Financing: Next Steps
Ultimately, the right choice depends on your financial situation, the urgency of your roofing needs, and your ability to meet repayment terms. We urge you to take the time to assess your financial situation and research many different financing programs before committing to one.
Each option offers you unique advantages. By exploring all available options, you can confidently select a financing plan that aligns with both your budget and long-term goals.
Interested in learning more about each of these financing options? Read our article “4 Ways to Finance Your Roof Replacement Job” to dive further into the details of each financing option and help you make an informed decision.
And, to apply for RoofSmart’s financing programs, click here.
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