Financing Residential Roof Repair and Replacement

It’s not everyday you replace your roof. Most well-installed residential roofs are virtually maintenance-free and last a long time. When it comes time for replacement however, the cost of a new roof can create a pain in the wallet. It’s one of the larger home repairs that homeowners must sooner or later face.

It’s helpful to make some advance preparations when it comes to roof repair. The cost to replace an average size roof, including labor and materials, can be fairly high, depending on your region. There is plenty of time to watch a roof age and deteriorate, usually many years, so periodic roof repair or replacement doesn’t have to be a surprise. But if it catches you off balance, there are still ways to get the job done, and the check written.

The most obvious and traditional way to fund a roof replacement is through planning ahead and saving. Ideally a home purchase should be at a price which still enables the homeowner to put away funds for a rainy day, as well as accumulate a nest egg that permits strategic repairs and upgrades. Saving a percentage of income regularly takes the sting out of the moment these repairs are needed.

Sometimes it’s not possible to set aside funds ahead of time, or perhaps your well planned funds were already consumed by an earlier crisis. In this case it may be necessary to consider some manner of financing for your roof replacement.

If your home value contains a substantial amount of equity, you may be able to use this to your advantage. A home equity loan, which allows you to borrow against equity you have accumulated, can provide for repairs, while also leaving you ample time to repay or replace the funds necessary for your new roof.

During the recent US recession, many homeowners lost some or all of the accumulated equity in their home. Some lost more than their home was worth. In these cases, more creative financing methods may be required for those without savings who need additional roof repair resources. Some roofing contractors partner with finance companies who will approve homeowners with good to average credit. Not every contractor will offer a program like this, but those who do get paid when the job is complete, and the risk for repayment from the homeowner remains with the finance company.

Some roofing contractors who are very financially stable, offer in-house financing for qualifying buyers, which will break payments up over 2-3 years. This is a good alternative provided the homeowner has the cash flow to keep the payment agreement. There will usually be a finance charge ranging from 3% to 8% or higher.

There are also mortgage related programs which might be of assistance to certain homeowners, for which a roof replacement qualifies. One such program is the FHA’s Streamlined 203(k) Limited Repair Program. This is a government loan for up to $35,000.00, covering major repairs, which can be added to a mortgage.

Some of the larger home improvement store chains offer opportunities for store financing or making payments via a store credit card for home improvement projects. Once a homeowner qualifies, the charges are added to their card and installments can be made for sometimes up to 7 years. In this case the materials and the contractor services are usually arranged through the retailer.

If you are planning to live in your home for a number of years, it’s best to keep an eye on the condition of your roof, and even to have a periodic inspection if it’s more than 12-15 years old. You may find out that your roof has 5-10 years of good service left under normal wear conditions. This could be more than enough time to put funds aside, and add the quality roof which will keep your home in top condition.

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