If your roof needs an overhaul or you are looking to install a new one, the proposition could be pretty expensive. According to some estimates, a roof replacement job costs approximately $8,000 on average. Unless you have that kind of money to spare, which most people don’t, you will have to continue spending sleepless nights fearing when your roof might give away.
Fortunately, there are financing solutions available to help you pay for a roof replacement cost. However, before proceeding to take a close look at these options, we thought it is better to introduce you to a few factors that affect the cost of roof replacement. These factors will help you draft a rough estimate of the expenses and the amount you need to borrow.
What Determines Roof Replacement Cost?
Several factors decide the cost of a roof replacement job.
1. Time of Replacement
The cost of roof replacement is comparatively less in winters or during early spring, as most roofing contractors are busy during the summers up to the fall.
2. Roof Size
Roofing companies typically quote their prices on a square feet basis. The bigger your house is, the more you will need to pay.
3. Roofing Material
A wood or metal roof no doubt looks upmarket, but it also costs so much more. On the other hand, if you decide to go with an asphalt roof, it will solve your roofing problems and cost far less.
4. Labor Charges
Every roofing company or contractor charges different hourly rates for the labor it supplies. Make sure you source multiple quotes as the labor rates may vary significantly across service providers.
5. Disposal Fee
Roofing companies also charge you separately for disposing of the old roof and other supplies, which can significantly add to your final bill.
As Promised – Financing Solutions for Roof Replacement
As discussed earlier, there are financing solutions available to help you pay for a roof replacement cost. We present the five most popular options you can choose from to finance your roof replacement job.
1. Homeowners Insurance
If you have a homeowners insurance policy, you can use it to apply for funds needed for a new roof. Most insurance companies only cover roof repairs and replacement required because of damages caused by fire, storm, or theft. So, if you need a roof replacement because the roof is too old or you failed to maintain it, the insurance company will not cover the costs.
2. Equated Monthly Payments
Several roofing companies provide the flexibility to pay for the roof replacement cost by paying a fixed sum every month. However, please remember that they will charge you interest depending on the number of months or years you decide to keep the loan.
3. FHA Title I Loan – The Ultimate Roof Replacement Solution
FHA, or the Federal Housing Administration, provides home improvement loans under the Title I loan initiative. If you own a single-family house, you are entitled to borrow up to $25,000, with a repayment period of 20 years. These loans are offered by Credit Unions and Banks, each having separate guidelines and interest rates. Please ensure you consult them regarding each aspect beforehand, as the failure to pay monthly dues might lead to a seizure of your assets.
4. Home Equity Loan
A home equity loan is a popular and cost-effective way that lets you pledge your home’s equity as collateral with banks and financial institutions financing your roof replacement cost. According to the Federal Trade Commission guidelines, the maximum amount you can borrow is equal to 85% of your home’s equity. However, please do not forget that you can even lose your home if you default on monthly payments regularly.
5. Personal Loans
Personal loans should be the last avenue you resort to if everything else fails. The reason is simple and economical. Unlike FHA loans, you only get between 2-5 years to repay personal loans. Banks, financial institutions, and Credit Unions do extend personal loans up to $1,00,000; however, trust, they are so expensive you might have to repay 150-175% of what you borrow.
Final Thoughts
There is no doubt that the various financial solutions available offer peace of mind. However, also remember that these services come at a price themselves. We recommend you thoroughly research the different options available to choose one that best suits your needs.
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