Roof Financing 101: The Homeowners' Guide

By Annie Crawford 09-08-2021
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Unclear about how to pay for a new roof replacement? This simple guide can help you break down the basics of new roof financing.

What Is Financing?

"Financing provides purchasing power," says Jeanne Lin, Vice President of Consumer Finance and Payments at GAF. "Homeowners can get the best possible roof for their needs, upgrade to a higher-grade shingle, and keep monthly payments at an affordable level."

If you've financed a car purchase or a home mortgage in the past, then many elements of financing a roof replacement may sound familiar:

  • Your principal is the amount of money you borrow.
  • The APR includes your interest rate plus any fees the lender charged when you borrowed the money.
  • There is a cost to borrow money, which is your interest rate. This is a percentage of the total amount you borrowed, which the lender charges as a monthly fee.
  • The lender earns money through fees plus the interest you pay as part of your monthly payment.

Lin recommends carefully reading the terms and details of your roof loan to avoid unnecessary debt.

What Are the Different Types of Financing?

There are many ways to finance a roof repair or replacement, but some of the most common include:

  • Home Equity Line of Credit: Often referred to as a HELOC, this allows the lender to use your house as collateral against the money borrowed.
  • Personal loans: The structure of these loans varies by lender. Some have fixed interest rates, which stay the same throughout the course of the loan, while others offer variable interest rates. Lin suggests shopping around between different banks and credit unions to find the best options—current interest rates for personal loans range from 5.97% to 36%. This range depends on factors such as your credit score or the length of the loan.
  • Contractor financing: Some contractors offer financing often through their partner institutions. There are multiple perks to contractor financing, according to Lin—combining contractor and lender into one simple process can open up no-interest options, low-interest options, and lower monthly payments.

How Much Will It Cost to Finance My New Roof?

The average cost of financing a new roof will vary depending on factors such as how much you borrow, your APR and loan terms, and whether you miss any payments. Over time, missed payments may lead to penalty fees or higher APRs. At the end of your loan, you will have paid back the total amount you initially borrowed plus the total of all the interest and fees you paid throughout the loan.

As you consider financing a roof project with your contractor or financial institution, ask about options that reflect what you can reasonably pay each month.

"Every family is different, and budgets and finance needs can vary greatly," says Lin. "Evaluate your current budget and expenses prior to initiating the roofing project—discuss flexible payment options you can afford with your contractor."

When you apply through your home improvement contractor, the cost of the roofing project will factor into the application, and your financing will be approved for a certain amount. This simplifies things for you; however, if the job size or contractor changes, you may need to request a line review with the finance provider.

The size of your house, the roofing materials you select, the complexity of your roof project, and your geographic location all shape potential costs. When reaching out to roofing contractors, ask about finance options to get reliable estimates.

When Is Financing a Worthwhile Option?

Financing expands your roof project options and allows you to safeguard cash on hand for other purposes. Financing can also help to increase the value of your home by allowing you to upgrade your roofing materials. Additionally, a "same as cash" financing option may allow you to pay off other higher loans you have, helping to reduce your overall debt, says Lin.

Many people with plenty of cash on hand choose to finance. Financing allows you to decide when and how much you want to pay each month for your new roof. For those with a fixed monthly income or who prefer to keep an additional cushion in their bank accounts, a payment plan can be a simple way to help turn a roof repair into a home improvement.

What Are the Steps to Begin Financing?

The steps involved in financing a roof repair depend on your lender. This process can either be done with a trusted contractor or through bank applications (personal loan or HELOC). If one chooses to go through a bank, the process can vary, but it typically involves completing some paperwork and submitting documents or other information. Approval may take 10 days or more.

Alternatively, contractors work in tandem with a financial lender to collect any necessary information on your behalf. Lin explains that all you generally provide is identifying information such as your name, address, and Social Security number. In many cases, you'll receive your decision within minutes. You can often manage contractor financing over the phone, through the financing application website, or via a secure mobile app.

Contractor financing may often offer more competitive terms than personal loans do. The primary decision should always come down to a monthly amount you can afford, says Lin—don't stretch your budget beyond what you know you can pay over time.

Because contractor financing is often approved faster than a personal loan through a bank, working with a trusted contractor can streamline the process when a roof repair can't wait.

Concerned about your credit? Roof financing with a lower credit score is possible. Qualified GAF certified contractors* have partnered with finance partners such as Fortiva to support homeowners with lower credit scores. Interest rates on these loans are typically higher, explains Lin, so staying on top of monthly payments is even more important—accruing added fees makes the loan more expensive to pay off in the long run.

Are There Roofing Companies near Me That Offer Financing?

Local roofing companies can help you navigate roof financing. Reach out to your local contractor certified by GAF* to get started on your roofing project.


For informational purposes only and not for the purpose of providing financial, legal, insurance or tax advice. GAF does not provide financing, and any loan or other financing programs promoted by GAF are provided to the homeowner or consumer directly by licensed and regulated third party financial organizations unaffiliated with GAF. Financing is subject to availability, lender approval, credit requirements and terms and conditions.

*Contractors enrolled in GAF certification programs are not employees or agents of GAF, and GAF does not control or otherwise supervise these independent businesses. Contractors may receive benefits, such as loyalty rewards points and discounts on marketing tools from GAF for participating in the program and offering GAF enhanced warranties, which require the use of a minimum amount of GAF products.

ABOUT THE AUTHOR
Annie Crawford is a freelance writer in Oakland, CA, covering travel, style, and home improvement. Find more of her work at annielcrawford.com.
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