The Truth About Financing A New Roof
Many contractors will offer options to finance a new roof, but is this the best route for you? While it can be convenient and get fast approvals, it’s typically not going to offer the best interest rates or terms. It can also lead to you spending more than you want.
We’ve become one of the most trusted Rhode Island roofing companies by helping guide clients in making smart financial decisions. We genuinely care about helping you make the best decisions for one of your biggest investments: your home.
A major part of our commitment is educating our customers about their financing options. Let’s talk about contractor financing. Here are the Pros and Cons:
Pros For Contractor Financing:
- Convenience: Many contractors offer financing to make the process a one-stop shop.
- Quick Approvals: They often provide immediate approvals due to their arrangements with certain lenders like Hearth or Enhancify.
- Direct Pay: Lenders will pay the contractor directly which may help you get your project started quicker.
Cons For Contractor Financing:
- Middleman Markups: When contractors shop your loan to lenders, it usually means increased interest rates because you now have several middlemen.
- Limited Choices: They may have connections with a single lender. This restricts your options and limits you from the best interest rates and terms.
- Potential Hidden Fees: Extra costs can sometimes be hidden in the loan costing you more in the long run.
Looking to talk to someone about your options? Contact us to learn more.
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Why Direct Lenders Are A Better Choice
Going directly to a lender eliminates the need for a middleman and ensures you get the best rates and terms that fit your unique situation. You have control over the application process, the ability to negotiate, and a broader choice of lenders to select from.
Using Home Equity for Financing
For homeowners considering larger transactions like additions or a new roof, tapping into your home’s equity can be a great option. Of course this depends on your current situation, how much equity is in your home, and your credit. Here are some pros and cons:
Pros:
- Lower Rates: Home equity loans typically have lower interest rates and longer terms compared to personal loans.
- Tax Deductions: Interest paid might be tax-deductible.
- Larger Loan Amounts: Based on your equity you can access significant amounts of money.
Cons:
- Potential Risk to Your Home: If you default your home can be at risk.
- Closing Costs: These loans can come with high closing costs.
- Possible Fluctuating Rates: If you opt for a HELOC (home equity line of credit) the rates can vary and change over time.
For the right situation, leveraging home equity has it’s upsides. However, there are still many options including home improvement or personal loans. See below for some of the best lenders to fund your roof or other home improvements:
Top 6 Lenders for Home Improvement Loans
Below we listed 6 lenders that are great to use for home improvement loans:
1. SoFi Bank
5.0
SoFi Rating
⭐⭐⭐⭐⭐
Quick Points: Buyers with good credit will be hard-pressed to find a better lender than SoFi. They also offer perks like free financial advising and unemployment protection.
SoFi Pros and Cons
Pros:
- Joint loan options
- Rate Discounts
- Hardship programs
- Good Mobile App
Cons:
- High minimum loan amount
- Can’t choose payment date
2. Upgrade
5.0
Upgrade Rating
⭐⭐⭐⭐⭐
Quick Points: Upgrade loans come with multiple rate discounts, have low minimum credit score requirements and come with long repayment terms on home improvement loans.
Upgrade Pros and Cons:
Pros:
- Rate Discounts
- Secured and joint loans
- Good mobile app
- Long repayment terms
Cons:
- Has an origination fee
- Can’t choose payment date
3. Discover Loans
5.0
Discover Rating
⭐⭐⭐⭐⭐
Quick Points: Discover provides excellent customer service and has many perks for borrowers that have good credit.
Discover Pros and Cons
Pros:
- No origination fee
- Soft credit pull to prequalify
- Fast Funding
- Flexible repayment terms
Cons:
- May charge late fees
- No joint loans
- No rate discounts
4. Lightstream
4.5
Lightstream Rating
⭐⭐⭐⭐
Quick Points: Lightstream provides great rates and no origination fees for borrowers that have good to excellent credit.
Lightstream Pros and Cons
Pros:
- No origination fee
- Rate discounts
- Long repayment terms
- Rate beat program
Cons:
- No prequalify
- Need several years of credit history
5. Wells Fargo
4.5
Wells Fargo Rating
⭐⭐⭐⭐
Quick Points: Wells Fargo provides great rates, good repayment terms, and great customer service, but only lends to existing customers.
Wells Fargo Pros and Cons
Pros:
- Variety of repayment terms
- Soft credit pull to prequalify
- Fast Funding
- Rate discount
- Choose payment date
Cons:
- Must be existing customer
- No joint loans
6. Rocket Loans
4.0
Rocket Loans Rating
⭐⭐⭐⭐
Quick Points: The biggest upside to Rocket Loans Programs is that it has fast funding, but lacks some features that other lenders provide.
Rocket Loans Pros and Cons
Pros:
- Rate discounts
- Soft credit pull to prequalify
- Fast Funding
Cons:
- Has an origination fee
- No joint loans
- Limited repayment terms