Roof financing costs and options

Repairing or replacing your roof is a major home improvement expense and may set you back around $10,000 or more. You can save up for the cost of the roof or your home insurance deductible. But if you need it done sooner rather than later, consider roof financing options like a personal loan, home equity loan or contractor financing.

How much does roof financing cost?

The average cost of a roof is around $10,000, according to statistics compiled by Angi. However, the exact cost depends on the home’s size, the type of roofing materials used, the complexity of the roof, your geographic location and other factors.

On average, expect to pay roughly between $4 to $11 per square foot for a standard asphalt roof. For example, a 2,000-square-foot home might cost between $9,000 and $24,000, whereas a 1,200-square-foot house could range from $6,000 to $14,000. Also, consider that costs may vary wildly based on where you live—expect to pay a lot more for a new roof in Toronto or Vancouver than you would for a comparably sized roof in rural Saskatchewan.

Calculate your loan costs for a roof

How much your loan costs depends on the type of loan you get, how much you finance and your eligibility criteria. Fees and interest also vary by lender. But, you can play around with loan terms, rates and loan sizes to get an idea of how much your loan might cost.

Roof financing options

There are multiple home improvement loan options to fund a roof. The way you go depends on whether you need a roof repair or a roof replacement.

Personal loans

A personal loan for home improvements might be a solid option if you need fast funding, prefer an unsecured loan and have a good credit score. Personal loans typically range from $500 to $50,000—or even as high as $100,000—and rates range from 6.99% and 46.96%. Exact loan terms may vary by lender but usually range from 3 – 60 months.

Many personal loan lenders require a minimum credit score of at least 660, but you’ll likely need a score over 700 to qualify for the best rates. You may also be charged an origination fee, which can cost up to 5% of the loan amount, although not all lenders charge an origination fee.

Compare personal loans for roof financial

HELOC or home equity loan

If you have at least 20% equity in your home, you may qualify for a home equity loan or a home equity line of credit (HELOC) to finance your roof project. A home equity loan is a lump sum of money at a fixed interest rate that you’ll repay in equal monthly installments, much like a personal loan. A HELOC is a revolving line of credit—similar to a credit card—and usually comes with a variable interest rate, meaning your payments fluctuate.

Both types of home equity financing use your house as collateral, so you risk losing your home if you can’t repay the loan. Plus, a home equity loan or HELOC can take a while to process, so if your roof is in really bad shape, this is not your fastest financing option.

But there could be tax advantages if you’re installing solar panels on your roof or getting the roof done on a property used for rental income. There could also be tax benefits for getting a new roof as part of a renovation project to make your home accessible for an elderly or disabled person.

This might be worth it in the long run if your roof doesn’t need to be repaired or replaced immediately.

Contractor financing

Your roofing contractor might offer financing as well. Some may have an in-house financing option or use a third-party financial institution. You may even be able to get short-term, no-interest financing, although you could find that you’re paying more for the roof installation or repairs than with a smaller outfit that doesn’t offer financing.

If you go this route, compare the terms and conditions with other roof financing options, and watch out for hidden fees. You may also be charged higher rates from a contractor—or third-party financer—than other financing options. In addition, contractor financing may require a lien on your house until you repay the loan.

Credit cards

If you find it tricky to qualify for a personal loan or don’t have time to wait for home equity financing, you could put your roofing project on a credit card. Rates are typically higher than other financing options, but if you can pay it off quickly, you can minimize the interest charges.

Another option is to apply for a credit card with a low interest rate, which could give you a year or more of low-cost financing. This may also be a sensible option if you need roof repairs versus a total roof replacement because the cost won’t be as high.

How to get a roof loan

Obtaining a roofing loan depends on the type of loan you’re seeking, but here are some basic guidelines to get started.

• Get multiple estimates. Most roofing contractors offer free, no-obligation estimates of the costs to repair or replace your roof. Be sure to get a few estimates and ask for detailed, written estimates, so you can compare the costs of labor, materials and other charges.
• Consult your budget. Figure out how much you can afford on a monthly loan payment. This amount gives you an idea of how long a loan term you need based on the project’s cost.
• Check your credit score. Knowing your credit score can help you decide which lenders to explore. If your roof replacement or repairs can wait, you may want to work on boosting your credit score before you apply. Learn more about credit repair.
• Estimate your home’s equity. If you’re considering home equity financing, you’ll need to know if your home has enough equity to qualify.
• Prequalify. If possible, prequalify with a few lenders to see what rates and terms you might qualify for, so you can find the best deal to meet your needs.
• Look out for fees. No matter which loan you apply for, look out for fees like origination fees or prepayment penalties that add to the loan’s total cost.
• Gather your documents. Find out what documents you need to provide, so you’re ready when it’s time to apply. Being prepared makes the loan process much smoother and faster.
• Read the loan terms and conditions. Once approved for a loan, make sure you understand the terms before signing the contract.

Roof repair vs. roof replacement

In some cases, it makes more sense to repair a roof rather than pay for a total roof replacement. For example, if the damage is minimal and not too expensive to fix, opting for repairs only could save you a lot of money. However, it may not be as aesthetically pleasing, and you may not get a warranty.

If the damage is fairly extensive, you might be better off getting a new roof. A new roof typically comes with some kind of warranty. It also adds value to your home, which could be important if you plan to sell anytime soon.

Bottom line

A well-functioning roof is a critical part of your home. A roof that’s in poor shape leaves the rest of your house at risk and detracts from its overall value. Whether you need repairs or a brand-new roof, multiple financing options are available, including home equity financing, personal loans, credit cards and contractor financing.

Frequently asked questions

• What credit score is needed for a roof loan?

  While many lenders work with bad-credit borrowers, you won't get the best interest rates. Typically, a credit score of 660 or better helps you get a loan with reasonable interest rates.

• Which loan is best for a new roof?

  Paying for a new roof is typically much more expensive than repairing it, so try for a loan with the lowest possible interest rate. If you can qualify, your best option is likely a home equity loan, or you may be able to get a good deal with contractor financing.

• Will insurance pay for a new roof?

  The only way insurance covers the cost to repair or replace a roof is if it was damaged by a fire, storm or other covered disaster. But even if insurance covers it, you'll likely have to pay a deductible. Depending on the size of the deductible—and the extent of the damage—it could potentially be less expensive to finance the cost rather than involve the insurance company.

• Are there government loans or grants for roof repairs in Canada?

  No. The Canadian government doesn't offer loans or grants for roof work. However, you might be eligible for tax advantages if you install solar panels on your roof, complete roof work on a property used to generate rental income or get a new roof as part of a renovation project to make your home accessible for an elderly or disabled person.

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