3 Ways to Pay For a New Roof

Are you searching for options on how you can get your roof paid? In this article, we’ll explore the top three payment options most homeowners choose for a roof replacement, along with which option is best for you. Plus, we’ll also break down what includes the cost of a roof and the importance of getting a detailed estimate.

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Understanding Roof Replacement Costs

What Influences The Cost of a New Roof?

• Roof Size: The size of your roof plays a major role in determining the cost of a replacement.
• Roof Material: The roof type you choose is one of the most significant factors affecting your roof's cost. Different materials come with varying price points, durability levels, and aesthetic appeal.
• Labor: Labor costs are another significant component of roof replacement. These costs can vary depending on roof complexity and the company.

Why it's Essential to Get a Detailed Estimate

• Hiring a roofing contractor who's well-versed in the industry and can provide a clear roofing estimate is key. This transparency ensures you understand exactly what you're paying for and allows you to make informed decisions about your budget.

Payment Option #1 - Paying Out of Pocket

Paying out of pocket is a straightforward way to pay for your roof replacement. You can utilize your savings or available money to cover the entire cost. This option eliminates the need for loans, interest payments, or dealing with insurance claims. We recommend this option if you're able to afford the cost of the roof replacement, upfront.

Advantages:

• Avoid Interest & Debt: By avoiding monthly payments, debt, and interest, it'll save you money in the long term.
• Simplicity: The process is much more straightforward and you don't have to run any loan applications if you're paying out of pocket.
• Potential Discounts: Some contractors even offer a discount if you pay fully upfront out of pocket.

Disadvantages:

• Large Upfront Expense: Paying for a roof replacement typically costs over $20K for most homes, which can be a significant cost for some.
• Feasibility for Larger Projects: For homeowners investing in premium roofing materials or replacing roofs on larger homes, paying out of pocket may not always be a practical option.

When Paying Out of Pocket is Best

• You've set aside savings for emergency home restoration funds specifically for situations like roof replacements.
• You're able to afford to pay for your roof replacement upfront (consult with your financial advisor).
• You prefer to avoid paying interest and the other cons that come with loans.

We recommend consulting with your financial advisor to see if paying out of pocket is feasible for your situation.

Payment Option #2 - Using Homeowners Insurance

Using your homeowners insurance can significantly reduce the financial burden of a roof replacement. If you suspect your roof has been damaged by unexpected events such as a storm, tornado, or hail, it’s important to contact a roofing professional and file your insurance claim as soon as possible.

Advantages:

• Reduces Out-of-pocket Expenses: If your roofing claim is approved all you have to pay mainly is the deductible that the insurance has set.
• Financial Protection: Homeowners insurance provides peace of mind, knowing that if something unexpected happens to your roof or home, you’re likely covered and protected from significant financial strain.
• Cover Full or Partial Roof Replacement: Your insurance can offer financial assistance in various ways, with the most common being coverage for a partial or full roof replacement. Increasing your chances of receiving funds for a full roof replacement requires thorough documentation and clear communication. Partnering with a professional roofer can help streamline the process and ensure all necessary details are properly handled.

Disadvantages:

• Deductibles: You will have to pay money out of pocket for the deductible if your claim is approved, and the cost can vary depending on your coverage.
• Coverage Limitations: Insurance policies typically don't cover issues with roofs related to aging, wear and tear, or poor maintenance, which means you'll have to pay for the repairs/replacement out of pocket.

When Using Insurance is the Best Option

• The damage to your roof is caused by covered peril in your insurance, such as a storm or fire.
• The total roof replacement cost is significantly higher than your deductible making it an appropriate option.
• Your policy explicitly covers the type of damage, and you have clear documentation for proof.

Payment Option #3 - Financing Your Roof

If you're unable to pay out of pocket or get insurance coverage for your roof replacement, your next best option in most cases would be utilizing financing. Whether you opt for a personal loan, a payment plan through your roofing contractor, or even a home equity loan, financing makes it possible.

Advantages:

• Spread Costs Over Time: One of the main reasons homeowners choose financing is to spread the cost over time, avoiding the need to pay a large lump sum upfront. However, some financing options may require a minimum down payment to get started.
• Flexible Options: With a wide variety of loan types and terms available, you can choose a plan that fits your budget and financial goals.

Disadvantages:

• Interest Costs: You'll be required to pay interest, which increases the overall cost over time.
• Long-Term Commitment: Taking on debt can strain your budget, especially if you already have other financial responsibilities.
• Hidden Fees or Penalties: Some financing agreements may include hidden fees such as prepayment penalties or even origination fees.

When Using Financing is The Best Option

• Your savings are insufficient to cover the roof replacement cost.
• The homeowners insurance doesn't cover the roof replacement or only partially covers it.

Final Words

‍Getting your roof replaced is a big decision, but understanding your payment options can make the process much smoother. Whether you're paying out of pocket, using insurance, or exploring financing, the key is to find the solution that best fits your financial situation and needs. At Global Exterior Experts, we offer a variety of financing options along with other flexible payment plans in Illinois. Feel free to reach out if you have any questions.