There are approximately 10.4 million residential swimming pools in the US. Residential pools are a fantastic source of fun and exercise, particularly during times when public swimming pools are closed.
But for many people, installing a backyard pool can seem like an impossible venture because of the costs involved. In the US, it costs between $30,000 and 50,000 to install an in-ground swimming pool. An above-ground swimming pool costs $6,243 on average.
These figures can leave you wondering how to finance a pool if you don’t have that much money saved. Thankfully, there are numerous financing solutions for homeowners looking to build a pool.
In this comprehensive guide, we discuss the options homeowners have for financing a pool. We’ll also give you a few smart guidelines on how to get financing for a swimming pool.
Read on to learn more.
Pool Financing Options
There are lots of options for financing a pool if you’d like to avoid the financial strain of paying for the project out of pocket. Check out these five options to see what works best for you.
Pool Financing as Part of Construction Financing
If you’re building a new home and are using a construction loan to fund it, you may be able to integrate a swimming pool loan into the construction loan.
Of course, doing so will depend on your lender and whether that option is available. If your lender allows it, then integrating the two loans can save you both money and time compared to taking two separate loans.
Refinancing refers to replacing your current home loan with a new one. By refinancing, you can reduce your monthly payments and enjoy lower interest rates.
If your home has sizable equity, you may even be able to get some cash back once you refinance. With this cash, you can opt to build a custom pool.
Home Equity Line of Credit (HELOC)
A HELOC refers to a revolving line of credit that uses your home’s equity as security. This type of credit works like your credit card. Once the bank approves you, you can access enough funds to finance a swimming pool and then pay the money back based on the schedule agreed upon.
The best thing with HELOC is that you make monthly payments based on the amount you withdraw. That means you only pay interest on the specific amount of money you borrow. And given that the draw period is a decade or so, you’ll still have access to the line of credit after you’ve finished paying off your pool.
Home Equity Loan Swimming Pool Financing
This type of financing is similar to a HELOC in a few ways. Like a HELOC, a home equity loan is a type of second mortgage. That means you borrow against your home’s value.
Using the money you get from the loan, you can finance the construction of a pool.
The difference between this type of loan and a HELOC is that you don’t get funds on an as-needed basis. Instead, the lender gives you a one-time lump sum to fund your pool’s installation.
One of the best things with home equity loans is that they have fixed rates and payments. This makes your monthly costs predictable.
Some homeowners prefer financing a pool without using their home’s equity as security. If this sounds like the best option for you, you may opt for an unsecured personal loan.
Many online lenders, credit unions, and banks provide personal loans for people looking to build pools. That’s why these loans are commonly advertised as pool loans. As soon as the lender approves you, you receive a lump sum amount to fund your pool’s construction.
The best thing about these types of loans is that you receive funds much faster than the other options on this list. Moreover, you don’t risk foreclosure in case you’re unable to continue making pool loan payments.
What to Do Before Getting a Pool Loan
Now that you know the options you have for pool financing, it’s time to look at a few essential things to do before you take a loan. Here are three of them.
Know Your Budget
Before talking to a pool financier, you need to know how much you need to borrow. This makes it easier for you when searching for loan estimates.
Decide what type and size of pool you’re going to build. Also, decide which types of pool furniture you’re going to add. Plan for other pool features as well.
Talk to multiple pool contractors to get estimates. Come up with a realistic timeline and budget for the project.
Find a Reputable Pool Financing Institution
Now that you have a good idea of how much you need for the installation of the pool, it’s time to look for suitable lenders. You want to work with a lender you can trust and who’ll make your life easier, not harder.
So how do you find the ideal lender?
Ask your friends, relatives, and colleagues for recommendations. Online reviews can also offer great insights on which lenders in your area you should talk to. Talk to at least three pool financiers before making the final decision.
Consider the Total Cost of the Loan
You want to take note of all loan repayment terms, so you can determine whether the repayment process is realistic for your budget and timeline.
But more than that, you want to know what the loan’s full cost is. Remember, a loan is much more than just the amount you are borrowing. There are interest rates, consultation fees, application fees, and often, early repayment fees.
That’s why you shouldn’t focus on just the principal amount. Moreover, don’t let a single loan fee or the interest rate alone be the deciding factor when comparing lenders. Calculate all potential expenses of a pool loan before making your final decision.
Now You Know How to Finance a Pool
When you don’t have the money upfront, you may be at a loss on how to finance a pool for your home. Thankfully, there are options for pool financing for you to choose from. By choosing the right option and working with the right institution, pool installation should be a breeze for you.
Are you interested in reliable pool financing solutions? Please contact us today.