As the summer months’ heat starts rolling in, you might finally be ready to take the plunge and install a pool at your home in Firethorne, TX. But before you start shopping for poolside loungers, you need to think about pool financing.
Building a swimming pool is expensive. An in-ground pool will cost you between $29,000 and $55,000. But cost shouldn’t scare you from achieving your dream of having a swimming pool on your residential property.
If you’re one of the homeowners in Firethorne, TX, you can leverage a few pool financing tips. Read on for some crucial tips on how to finance a pool.
Research Your Financing Options
Before starting pool construction, you need to explore your pool financing options. You might be able to finance your pool through the following:
Home Equity Loan
A home equity loan is a second mortgage on your home. It allows you to borrow money to finance your pool against your home’s equity. The amount of money you get in this option will depend on your home’s value and outstanding mortgage.
A home equity loan will be an excellent option if your home equity amount is high. You can get up to 85% of your equity. The interest rate on a home equity loan is usually lower than the rate on a personal loan or credit card.
However, this option is risky. Your residential property will be subject to foreclosure if you default on your loan payment.
Home Equity Line of Credit (HELOC)
A HELOC is a financing option that allows you to borrow against your home’s equity. The main difference between a HELOC and a home equity loan is that with a HELOC, you have a revolving line of credit.
This means that you can borrow money as you need it and make payments on the outstanding balance. A HELOC can be a good pool financing option if you don’t need all the money upfront. But like a home equity loan, a HELOC is a risky proposition as your home could face foreclosure.
Personal Loan
If you don’t have equity in your home or you don’t have collateral, you can apply for a personal loan. Personal loans have a fixed interest rate, so you’ll know exactly how much your monthly payments will be. The repayment terms on a personal loan are usually shorter than those of a home equity loan or HELOC.
This means that you’ll have to make higher monthly payments. The best thing about a personal loan is that it’s unsecured. You’ll qualify for a personal loan with a lower fixed interest rate if your credit score is high.
Dealer Financing
If you’re buying a pool from a dealer, you might be able to finance it through the dealer. Some pool dealers have their own financing companies that offer loans to customers. In Firethorne, TX, Sahara Construction and Custom Pools partners with financial institutions such as Lyon Financial.
The terms and interest rates on dealer financing will vary depending on the company. But in general, the rates are higher than those of personal loans and home equity loans.
If you decide to finance your pool through the dealer, compare the interest rates and terms of different financing companies. This way, you can get the best deal possible.
Cash-Out Refinancing
If you have equity in your home, you can use it to finance your pool by taking out a cash-out refinance. With a cash-out refinance, you borrow more money than what you owe on your existing mortgage and get the difference in cash.
You can use the cash to finance your pool project. The interest rate on a cash-out refinance is usually lower than the rate on a home equity loan or HELOC. But if you can’t make your payments, you could lose your home to foreclosure.
What to Consider Before Deciding the Best Way to Finance A Pool
Now that you know the different pool financing options, it’s time to decide which one is best for you. Here are some factors to consider:
Your Credit Score
Your credit score is important because it will affect the interest rate you’ll get on a loan. You’ll qualify for a lower interest rate if you have a high credit score.
But if your credit score is low, you might not be able to get a loan at all. You might have to consider other options for financing a pool, such as dealer financing.
The Terms of the Loan
When you’re considering a loan for your swimming pool financing, it’s important to look at the loan terms. These include the interest rate, repayment period, and monthly payments.
You should also consider the fees associated with the loan. Some loans have origination fees, prepayment penalties, and other costs that can add up. Choose the option with the friendliest terms.
Availability of Home Equity
If you’re thinking about taking out a home equity loan or HELOC, you need to have equity in your home. If you don’t have any equity, you won’t be able to get a home equity loan.
And if you have very little equity, you might not be able to get the amount of money you need to finance a pool. In such cases, you can consider options like a personal loan or dealer financing.
How Much Money You Need
How much money do you need to finance your pool? This question is all about your pool’s budget. Your budget will depend on the type of pool, size, and other features.
The answer to this question will determine what type of loan you can get. If you just need a small amount of money, you can consider a personal loan. But if you need a large amount of money, you might have to take out a home equity loan or HELOC.
Looking for Pool Financing Options in Firethorne, TX?
There are many pool financing options available to homeowners in Firethorne, TX. You can choose the best option for you based on your credit score, budget, and availability of home equity.
Consider working with Sahara Construction and Custom Pools if you need help finding the right pool financing option in Firethorne, TX. We can help you find the best way to finance your pool. We’ll also help you design and install a custom pool.
Contact us today to make your dream pool a reality.
