Hello World! Welcome Friends! What can be more relaxing and satisfying than having a backyard pool, especially when social distancing is encouraged due to Covid-19. Having your own swimming pool would not only enhance your house’s aesthetic, but also enable you to cool off whenever you want. There are several companies that offer swimming pool installation, but the question is, do you have the budget to afford the installation of a swimming pool in your backyard?”
It is an expensive and luxurious desire to have a pool of your own, as the installation of in ground pools costs almost more than $50,000 on average. Obviously, not everyone’s budget will be able to afford such an expense. This article will provide you with the information to make the swimming pool financing process easier and more affordable.
Home Equity Line of Credit (HELOC) Pool Financing
HELOC allows you to borrow money with a fixed credit limit set by the lender and then pay back the borrowed amount with interest. If you get approval for this financing scheme, you should be able to access enough credit in order to finance your pool. HELOC enables homeowners to borrow and spend the funding as needed.
HELOCs best aspect is that the interest is accumulated only to the amount that you borrowed and monthly payments are based on the amount of withdrawal from the account. This pool financing option offers much lower interest rates as compared to personal loans and credit cards. The process does not take months, unlike a traditional mortgage, instead taking only weeks.
On another note, pool financing requires comparatively less documentation as compared to other expenses. The only issue with HELOC”is that it charges variable interest rates.
Cash-Out Refinance to Pay for Your Pool
You can replace your current mortgage with the new one by refinancing, this would enable you to get reduced monthly payments and lower interest rates. When you refinance, there is a probability that you get cash back, depending on the amount of home equity. You then use the cash for multi-purposes, such as home improvements, debt consolidation and building a swimming pool.
The biggest benefit of cash-out refinance is that it enables you to borrow almost 80% of your home equity. Cashing out is not the only advantage of refinancing, it also benefits you by enabling you to increase or decrease the loans term, remove mortgage insurance and switch from one mortgage scheme to another. The only problem with refinancing is that you have to go through the approval process and mortgage application again.
Personal Loans
If you want to finance your swimming pool without utilizing your home equity, you should apply for an unsecured personal loan. Credit unions, banks and other financial institutions will facilitate personal loans for items such as a pool.
It takes less time to get funds with a personal loan as compared to HELOC or cash-out refinance. The process of applying for a personal loan is quite simple, as most of the time, funds are received within a few days or a week.
The major issue with personal loans is that the interest rate charged by lenders is quite high compared to other options. It would be wise to compare interest rates among different lending options before applying for a personal loan.
Home Equity Loan
A home equity loan is another type of second mortgage and is similar to a HELOC. You can utilize your home’s value in order to borrow funding, which you can spend on multiple purposes.
The most important benefit of a home equity loan is that you would be charged with a fixed payment and interest rate. This would help you to predict your monthly cost. It comes with the closing costs and your house acts as collateral for the loan.
Conclusion
Pool financing is a great option if it is not within your budget to buy a swimming pool outright. Installing a swimming pool is expensive, but the financing options mentioned above will help make this transaction more affordable to get the pool of your dreams.
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Toodles,
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