Summer is just around the corner and soon, the days will be warmer and longer. Truly, there’s nothing like being able to cool off on a hot summer day by diving into your own backyard swimming pool. However, on average, an in-ground swimming pool cost about 28,000 – $55,000. And if you’re like most people, you probably don’t have that kind of cash on hand. That’s where home improvement financing can help! Below, we’ve discussed some different financing options for building a swimming pool.
Financing Options for Building a Swimming Pool
Today, there are plenty of financing options not only for buying a home but also for making improvements to a property you already own. If you’re thinking about building a swimming pool, you may want to reach out to your lender to discuss some of the following options:
Home Equity Line of Credit
A Home Equity Line of Credit is a revolving source of funds provided by a lender that works a lot like a credit card. This type of financing gives homeowners access to cash based on the amount of equity they have in their home. Usually, interest rates for HELOCs are lower than for personal loans and credit cards. However, rates do fluctuate depending on the market.
With a HELOC, you only take out as much money as you need. This way, you only pay interest on what you actually use. Funds can also be obtained fairly quickly too, unlike a cash-out refinance which may take months. Payments are added to your monthly mortgage.
Home Equity Loan
Another great home improvement financing option is a home equity loan. Home equity loans have fixed interest rates so the payment amount remains the same. These loans also have great interest rates, sometimes even better than HELOCs!
A major difference between this option and a HELOC is that you get the funds in one lump sum payment. Another difference is that since it’s an actual loan and not a line of credit, you have to pay closing costs.
Another option for paying for a swimming pool is to do a cash-out refinance. Cash-out refinances allow homeowners to obtain cash by tapping into their equity. A new loan is taken out to replace the old loan. The new loan may have a different interest rate and terms, which can sometimes work to a homeowner’s advantage.
In some cases, it may not make sense to do a cash-out refinance, especially if it means increasing your rate. You will also have to pay closing costs. However, if you’re able to get a lower rate, it could be a good thing. Plus, you’ll be able to finance your swimming pool!
Get Advice from an Expert
When it comes to home improvement financing, you’ve got choices. Let our experts walk you through your options and help you find the right one.