What You Should Know About Swimming Pool Financing
The time spent around a backyard pool with family and friends is priceless, but a pool comes at a cost. You don’t want to jump into the deep end of this investment without a financial plan. If you want to install a pool but you’re not sure if you have the finances to do so, we’ll share what you need to know about swimming pool financing.
Personal Loans
Personal loans, also known as pool loans, are among the most popular financing options because they don’t require you to use your home or car as collateral. Instead, a lender will look at your credit score to decide whether you qualify for a loan. While this is the fastest way to get financing, interest rates are typically high, and their short repayment terms require you to pay a considerable amount every month. Also, keep in mind that personal loans typically won’t cover a project that costs over $100,000.
Cash-Out Refinance
Cash-out refinancing involves replacing your current home mortgage with a larger one. Then, you use the new loan to pay off the previous one and take the extra cash to finance your pool. Not only can you borrow up to 80 percent of your home’s equity, but you could also find a lower mortgage rate! However, you’ll have to use your home as collateral for the loan, and if you can’t repay it, you’ll risk foreclosure.
Home Equity Line of Credit
A home equity line of credit (HELOC) is essentially a line of credit secured by your home that allows you to continuously borrow against your home equity. You can think of it like a credit card. During the draw period—around 10 years—you make an interest-only payment. You’ll continue to repay the amount borrowed for up to 20 years. Getting a HELOC is relatively quick, and the low rates make monthly payments easy to manage. However, payments aren’t fixed, which can make budgeting difficult. Again, you risk foreclosure if you fail to repay the loan.
Home Equity Loan
Both home equity loans and HELOCs are secured loans that use your home as collateral and allow you to tap into your home’s equity. The main difference between a home equity loan and a HELOC is that home equity loans have fixed interest rates, making monthly costs more predictable. Lenders are also less strict about credit scores and income requirements.
One of the most important things you need to know about swimming fool financing is that all of your options come with pros and cons. Limitless Custom Pools is one of the top pool installers in the Houston area, but we do more than build pools—we bring dreams to life. We can answer any questions about your financing options and will determine the best course of action.
