Your roof is an absolutely crucial aspect of your home, protecting you, your family and the rest of your house from the elements, external damage and long-term structural problems. Replacing or repairing your roof, especially when unplanned, can set you back financially; according to Home Advisor, it typically costs between $5,193 – $10,140 to fully replace a roof. This is an important, long-term investment, one that you do not want to skimp on. This article will teach you about financing a new roof, so that you can get the job done right and prevent further costs down the line.
What to Expect When Financing a New Roof
The cost of your new roof will depend on several factors:
- Size of your home: Obviously, the bigger your roof, the more it will cost you to replace. Quotes from roofing companies will be per “roofing square,” where 100 square feet is equal to one roofing square. According to the United States Census, the average roof is approximately 17 squares.
- Materials: Asphalt shingles are the least expensive roofing material to purchase, however you should keep in mind that they can be less durable and more expensive to upkeep in the long-run. Metal roofing is typically more expensive upfront, but can be a smart investment due to its longer lifespan, energy efficiency and the added value it can bring to your home.
- Installation: Be sure to budget for the cost of labor, as roof installation is complicated and needs to be handled by experienced professionals. Most companies will break down their quotes and allocate around 40% of the total price to products and 60% to labor.
- Time of year: Because roofing companies are typically very busy in the summer months, you may have to pay extra during the high season.
- Removal and Disposal: You will want to consider the cost of removing an old or damaged roof and properly disposing of the materials and waste. Keep in mind that most asphalt shingles will end up in a landfill, while many metal roofing materials can be recycled.
As most people will not be able to pay in full for a new roof out of pocket, there are several steps that can save you money. First, make sure you get at least three quotes from different companies that clearly break down the cost of materials and labor. Next, be sure to talk to your insurance provider – in some cases, especially when damage was incurred in a hurricane or other natural disaster, they may cover all or some of the costs. Finally, if you are financing a new roof, carefully consider your options:
- Federal Housing Administration loans like the Title I program or the 203k Rehabilitation Mortgage Insurance program, which permits homebuyers and homeowners to finance up to $35,000 into their mortgage to repair, improve, or upgrade their home. The downside is that these programs can be more difficult to qualify for.
- If you have equity built up in your home, you can take out a home equity loan. Your home equity is the current value of your home, minus the amount you still owe on your mortgage. The Federal Trade Commission site says you can usually borrow up to 85% of your home’s equity. However, this can be a risky option due to more severe consequences (potentially losing your home) for defaulting on the loan, so it’s advised to take out as little as possible if you go this route, in order to minimize the risks.
- A third option is to take out a personal loan through a bank, credit union or other financial institution. On the plus side, you don’t usually have to offer any collateral, so there is less risk of losing your home or other assets. However, these loans are usually shorter-term and have higher interest rates. This can be a good option for people with a great credit score and ability to pay back the loan quickly.
Getting a Roof Loan: Is It Expensive?
The short answer is yes – financing your roof is probably going to cost you and can be risky, so the best option is always to use your savings if you can.
Whether you qualify for one of the loans above and how high your interest rate will be depends on several factors, including:
- Credit score: Typically, the better your credit score, the lower interest rates you’ll pay.
- Income: Many loan providers will ask about your income to get an idea of whether you can afford to pay back the loan. You may have to submit a form of income verification, like a W-2.
- Debt: The more debt you have, the more difficult it will be to qualify for a loan.
Roofing Companies with Payment Plans
If you’re not interested or do not qualify for a roof loan, talk to the roofing companies you get a quote from about whether they offer payment plans. Payment plans allow you to spread your roof payments over several months or even years, depending on the company. Be sure to ask about interest rates and minimum monthly payments when exploring this option. Every roofing company is different, so ask around and weigh your options.
How to Finance a New Roof
In summary, there are many things you can do to minimize costs when getting a new roof, from choosing cheaper materials, to thoroughly exploring your contracting options, to applying for loans or securing a payment plan through your roofing company. Before making any big decisions, it’s important to explore your options fully, so that you can make a well-informed decision that is best for your home and your family. After all, your roof is a vital aspect of your home, and one of the most important investments you’ll make as a homeowner.
If you are in the Colorado area, you can contact us to request a free roofing estimate and explore options to get your home covered and save you money!