If the roof over your head is in disrepair, then it's probably time for total roof replacement. Unfortunately, residential roof replacement services can easily cost you thousands of dollars when they're done correctly by a reputable company. And if you weren't planning on having a new roof installed anytime soon, you may be wondering where you're going to come up with the money.
While many roofing companies offer payment plans and financing options, it's a good idea to explore all your options before committing to a residential roof replacement. After all, there are some lesser-known payment solutions that might suit your needs better.
FHA Home Improvement Loan
You don't need to have an FHA mortgage to take out an FHA home improvement loan, which allows eligible borrowers to take out up to $25,000 for major home improvement projects and/or repairs. With this type of loan, you'll even have up to 20 years to pay off your balance (though you can and probably should pay it off sooner).
Under this program, loans of under $7,500 aren't even required to be secured by your home's deed; and with the nationwide average residential roof replacement cost of around $7,200, this type of loan is a great choice for many homeowners in need of a new roof over their heads.
Borrowing Against Home Equity
Another sensible option to consider is a home equity loan, which typically allows you to borrow up to 85% of your current equity. You can determine your home equity by looking at your home's current value minus the amount you still owe on your mortgage. For instance, if your home is worth $150,000 and you have $100,000 left to pay on your mortgage, your equity is $50,000. Based on a "typical" loan amount of up to 85% of your equity, you'd be entitled to borrow up to $42,500. Because interest rates for this type of loan are relatively low and payment terms are flexible, this is an excellent borrowing option to cover roof replacement services and other major home repairs.
Submitting a Home Insurance Claim
Don't forget that if your roof was damaged as a result of a covered event, such as wind or hail damage, you may be able to get your homeowners insurance to pay for some of all of your repairs/replacement. Consult with your agent to determine whether you may be eligible to file a claim; even if your insurance doesn't cover the entirety of your replacement project, you can use the funds to offset your costs.
Residential roof replacement services are a large expense for most homeowners—but with these payment options, a new roof doesn't have to be a burden on your pocketbook!