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Question DetailsAsked on 5/14/2018

Need roof replaced; however, credit is not so good. Need recommendations on a company that may help finance/payment

Started to notice leaks. Need help before roof falls in.

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1 Answer


Here is a link to a previous similar question, with links to several others with answers applicable to your case:

First thing is a good inspection by a highly rated and reviewed Roofing company - might be you only have one or two bad spots and can get it fixed for $500-1500 commonly (if that is the case), then save for a total roof replacement, if the general roof condition is decent. Can save you from possibly paying a high interest rate on a large $ total reroof - which can commonly run about $4-7/SF range for asphalt shingles, $7-12 for wood, $10-25/SF of roof area (which is commonly 10-25% larger than house footprint due to overhangs and slope) for long-life prepainted metal roofing.

Of course, how long the leaks have been going matters a lot too - partly because long term leaking obviously leads to roof sheathing and maybe framing rot, and also because (with normal roofing with a roofing "shedding" layer like shingles, and a "water barrier" layer like tarpaper) if you are getting leaks through the sheathing (the planks or plywood or such over the framing) then you have shedding layer issues PLUS breakthrough of the water barrier layer. If very old roof, might not have a water barrier so any shedding layer leaks come directly through to the attic.

One other possibility is you have leaking flashing or roof penetration seals or such (if leaking around pipes or vents) which generally can be quite readily fixed. So - total reroofing, unless visibly pretty deteriorated (rusting metal, curled or splitting or badly cracking shingles for instance) might not be needed at this time, or be something an interim repair can stave off for another 5-10 years while you save up for a reroof job.

Sometimes the problem is just one area with wind damage, extreme sun damasgeto shingles, cracked or blown off ridge cap, etc - which might need replacement, but possibly only that one area for now if tight on funds. If going with partial reroof,usually best to choose one of the "forever" colors so you hoepfully find a near match in the future when reroofing the rest is necessary. Badly mismatched roofing detracts come sale time.

Normal financing options from normally lowest loan interest rate to highest - and be sure your financing is APPROVED and COMMITTED before signing a contract for the work if you cannot pay for it without a loan. The reason for your poor credit matters a lot too - poor credit judgement in the past and unpaid debts or excess credit card/store card debt (or of course defaults or bankruptcy) is a lot worse than poor credit because you have not accumulated much of a credit history because you pay as you go, or are just getting started in life so have a short history. (Rates listed are ballparks - vary by area, type of institution, equity in house, and of course your credit rating).

1) get a home improvement loan from bank or credit union (usually best rates there) or savings and loan company - typically cheapest kind of loan, works about like a second mortage but quicker to get for a specific upgrade/major repair like roofing. With good credit can be down around 4-7% rate, poor credit probably more like 7-10% range if they will give you a loan with your credit history. Usually more lenient because the value of the property is being increased by the spending of the loan money on the work, so their loan investment is more protected than if you are spending the loan money on something else.

2) if you have home equity you can use a HELOC - a Home Equity Line of Credit. Rates depend on lender and credit history and ability to pay, and also higher if cutting total debt on the property closer than about 80% of the resale value. "Normal" maybe around 7 -10% rates with normal credit for a loan not more than 80% of the home value, minus outstanding debt on it.

3) go with financing "offered" by the contractor - which almost always is actually through a third-party lender, so called "transaction lenders" which lend for home improvements, furniture or flooring purchases, etc. Terms depends on whether the contractor is subsidizing the interest rate - the classic "no payments, no interest (or low interest) for 12 months" type advertised deal, or not. If contractor does not have a subsidized rate deal (commonly 0-5% during promotion period - commonly 12-24 months max) you pay normal rate from day one. Failure to exactly perform per the terms and pay everything in time results in the rate for the entire period typically being reset to around 18-25%, so major risk there. With poor credit, likely to run over 20% rate once beyond any low interest offer period, and may get turned down anyway.

4) finance with an independent (non-bank) lender - some brokerage firms do this, major lenders like GE FInance / Synchrony and such, many insurance companies have lending arms - commonly around 10-15% these days for unsecured loans. There are also lots of distressed lenders who, for a very high interest rate, will lend - but commonly 15-25% rate.

Note - be VERY careful to integrate any loan with the contract - so you are not committed to one before the other is in effect, and so the loan payments cover the scheduled repair contract payments - you don't want a loan in effect (generally) before you have a firm contract price committment from the contractor, nor a construction contract in effect with the funding to cover its demands for payment. Commonly, with savings and loan or bank/credit union home improvement loans, they will escrow the funds in a construction package where they guarantee the funds (once loan is approved) and disburse the up-front deposit and following funds only upon certification by you and the contractor (and commonly their visual verification) that the applicable work for that progress payment has been done.

For this reason, dealing with that kind of institution can be less risky than getting a loan on your own to cover the contract cost. And of course, consider how long you need to pay any loan off - promotional deals commonly only last 1-2 years max, so if you are doing a major repair (like commonly $10-20,000 for a normal size house reroof) and need many years to pay it off, a home improvement or HELOC loan may be what you want. The former is commonly about 2% cheaper than the latter.

Answered 2 years ago by LCD

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