Roof Financing – How to Pay for a New Roof – The Ultimate Guide

When the time comes, replacing your roof is a big, important, investment. Since a new roof can cost $10,000 or more, paying cash is not an option for most homeowners. Financing, by taking out a home equity line of credit or a home improvement loan, is how most homeowners pay for the roof they need.

A new asphalt shingle roof with PV solar panels
New Shingle Roof

$7,500
Average price
New Metal Roof

$14,500
Average price
New Flat Roof

$8,225
Average price

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A line of credit or a loan allows a homeowner to pay in installments spread out over time, which is easier to handle than an upfront cash payment in full. This guide will help you sort out the different types of home renovation loans so you can find the one that best meets your needs.

The first step is to contact at least three licensed contractors to discuss your roofing options and to get estimates on the cost of a new roof. Knowing how much your new roof will cost will help determine which type of financing works best for you.

Home Equity Lines of Credit (HELOCs)

HELOCs are revolving credit lines that typically come with variable interest rates. Your monthly payment amount will depend on the current interest rates and your loan balance.

HELOCs are very similar to credit cards, except the rates are generally significantly lower because your home serves as a collateral, whereas credit cards are considered a form of unsecured debt (with some of the debt often becoming uncollectable for Credit Card companies, hence requiring high interest rates) with much higher interest rates.

Once, you are approved for a certain HELOC amount, you can then draw any amount, at any time, up to your credit limit. You can pay the loan down or off at will.

HELOCs have two phases. During the draw period, you use the line of credit as needed, and your minimum payment may cover only the interest due for that month.

However, eventually, usually after ten years, the HELOCs draw period ends and your loan enters the repayment phase. At this point, you can no longer draw funds and the loan becomes fully amortized for the remaining years.

HELOCs offer low closing costs and are very convenient. They offer low monthly payments during the draw period. The downside of these loans is that they use variable interest rates, meaning the interest rate can rise in tandem with the Federal Reserve’s prime rate.

Also, your monthly payments can significantly increase once the repayment phase begins and you begin paying both the interest and the principle on the loan.

Homeowner’s Insurance Coverage

You might be able to use your homeowner’s insurance policy to cover the cost of a new roof. Many homeowners’ insurance policies also include roof replacement insurance, and hence will cover roof replacement if the roof was severely damaged by fire, wind, or hail. However, if your roof degraded due to age and general wear-and-tear and/or due to a lack of maintenance (no roof cleaning, allowing moss outgrowth, not dealing with issues like loose shingles in time, etc.), the insurance company won’t cover the replacement. One thing to consider is that making a claim on your insurance will, most likely, raise your premium in the future.

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How Long Does a Roof Last? Top Signs You Need a New Roof

If you are in the process of buying a new home, you probably want to know the age of the roof and how much longer it will last. Similarly, if you’ve lived in your home for a while, you are probably also wondering about the current condition of the roof and whether it’s time to consider some viable replacement options.

Curled-up shingles

This guide outlines the expected lifespans of most popular roofing systems for homes. Print it out and use it to assess the life expectancy of any roof when buying a new home or planning for future roof replacement needs in your own home.

Right Off the Bat: A typical asphalt shingle roof will last anywhere from 15 to 25 years before requiring replacement.

That said, there are several different kinds of asphalt shingles, as well as other roofing materials to consider when estimating longevity of a particular roofing system. Let’s get started.

1. Asphalt Shingles

3 tab shingle is the most basic and least costly asphalt shingle option for slopped roofs. A typical 3-tab asphalt shingle roof will last anywhere from 10 to 20 years.

Cracks or thermal splitting in asphalt shingles

3-tab shingles are an OK option for temperate climates, but they are not at all suitable for storm-prone areas. The maximum wind-uplift a 3-tab shingle roof can withstand is 60 MPH to 70 MPH.

Note: When exposed to strong, direct sunlight and rapid temperature changes (thermal shocks) commonly associated with southern states and dessert climate zones (think Texas, Arizona, Oklahoma, Nevada, and parts of California dessert), asphalt shingles can develop cracks, resulting in a greatly diminished lifespan and premature failure.

Architectural aka Dimensional Shingles are thicker and hence more durable and longer lasting than their entry-level counterparts, three tab shingles. Most architectural shingle roofs will last anywhere from 15 to 25 years, depending on their environment.

Maximum wind uplift for most architectural shingle products is 110 MPH. With a special installation method and roof-frame bracing, the wind uplift rating can be increased to 130 MPH.

Premium Shingles are normally fancier-looking asphalt shingles designed for premium homes. A premium shingle is normally thicker and will last longer than a mid-range architectural shingle. Expected lifespan of a premium shingle roof is anywhere from 20 to 30 years, depending on the environment.

GAF Premium Asphalt Shingles: Camelot Williamsburg Slate

Wind uplift ratings for premium shingles are similar to architectural shingles. Premium shingles can also include special properties such as enhanced solar reflectance aka CoolRoof rating and impact resistance for hail prone areas.

See more details on various types of premiums shingles here: https://www.roofingcalc.com/gaf-vs-certainteed-roofing-shingles/

Tell-Tale Signs to Consider Replacement: If the asphalt shingles on your roof have developed major cracks, lost a lot of sand granules, are chipping and look dried-up or curled up, then you know it’s time for a new roof.

If the shingles are still in a seemingly good shape, but the roof has sustained significant storm or hail damage, then it’s probably time to consider replacement or partial replacement.

New Shingle Roof

$7,500
Average price
New Metal Roof

$14,500
Average price
New Flat Roof

$8,225
Average price

See costs in your area Enter Your Zip Code

Read more