When most people set aside money in a piggy bank or savings account, they’re saving up for fun things like vacations, concert tickets, or a new car.
Not foundation repairs.
While it’s always wise for a homeowner to have an emergency fund for house repairs, you still may not have enough money on hand to pay for a large, unexpected expense like foundation repairs. Thankfully, you have options as a homeowner to help you out because foundation problems can’t be ignored.
Take a look at these 6 foundation repair financing options available to you.
1) Payment Plans
One of the most common ways to finance a foundation repair project is through payment plans. If you can’t pay the total amount in full upfront, you can see if your foundation repair company accepts monthly payments over a set period of time.
Payment plans are facilitated through a third party and operate as a short-term loan. Some third parties may even offer “same as cash” loans which allow you to pay off the loan in installments with no interest.
At Perma Pier Foundation Repair of Texas, we offer payment plans through our partner Hearth Financing when you’re unable to pay the full amount upfront with a credit card, check, money order, or cash. Just like how your foundation needs a personalized solution, so does your financing option.
2) Personal Bank Loans
Another popular financing option for foundation repairs is personal loans. You can take out a personal loan through your bank or a private financing company. While you can probably get approved for a loan faster with a private financing company, you’ll likely get better interest rates through your bank.
There are certain things that will help you get approved for a personal loan. These include:
- Applying for a loan at a bank you already have an account with
- Only borrow what you need
- Care for your credit score beforehand
- Start applying as early as possible
- Understand the terms and how long you have to repay the loan
If you follow these tips, you should have no problem getting approved for a personal bank loan. If you’re denied, it’s likely due to a low credit score, poor repayment history, or unstable employment.
3) Federal Grants
Believe it or not, there are federal grants and loans that help specific homeowners improve their financing. These programs are offered through the U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of Agriculture.
The HUD offers the Title 1 Property Improvement Loan Insurance Program which can be used to finance the light or moderate rehabilitation of properties. Under Title 1, HUD insures lenders against most losses on loans that finance residential or commercial properties. Foundation repair falls under this program.
The Department of Agriculture also offers Single Family Housing Repair Loans & Grants (Section 504 Home Repair program) to very-low-income homeowners with an annual income of less than 50% of the median income in your area.
These loans help low-income homeowners make repairs and improvements to their homes, and grants are offered to elderly low-income homeowners to remove health and safety hazards. To qualify for this program you must:
- Be the homeowner and occupy the house
- Be unable to get affordable credit elsewhere
- Have a total household income that doesn’t exceed the very low limit of your county
- For grants, be 62 years or older and unable to repay a repair loan
Federal programs like this are fantastic for low-income homeowners who deserve to have a solid, healthy living space even if they can’t afford repairs upfront.
4) Funding at Closing
A unique financing option that Perma Pier offers our customers is called “Funding at Closing.” This financing option applies to homeowners selling their property.
Getting foundation inspections before buying or selling a property is very common. Major foundation issues are red flags, and usually deal-breakers, for prospective buyers. Prospective buyers want to know the transparent state of the foundation under the home they’re interested in buying because they don’t want to be left high and dry in a few months when they’re stuck with an urgent problem.
If you have foundation problems, you’ll usually only have luck with selling your home if you get foundation repairs before closing the sale. The “Fund at Close” program at Perma Pier can reduce out-of-pocket expenses for your foundation repair by allowing your closed home sale to help fund the foundation repairs you made on the property.
5) Homeowners Insurance
Homeowners’ insurance policies are sticky. They’re established to provide compensation to homeowners who have to pay for repairs that weren’t their fault. However, insurance policies often have a lot of fine print, and the agents will do everything in their power to deny claims.
However, that doesn’t mean you’re completely out of luck with homeowners insurance. It’s possible that you could get approved for a claim if your foundation damage was caused by burst pipes or other issues that originated from within your home.
Intense earthquakes, landslides, and floods can sometimes cause damage to your home’s foundation, but keep in mind that you’ll need to hold separate insurance policies as earthquakes, landslides, and floods are not covered by general homeowners insurance.
6) Home Equity Loan or Home Equity Line of Credit
These last financing options are tentatively recommended, only if you don’t have any other options. They are home equity loans and home equity lines of credit.
- A home equity loan is a loan secured by a second mortgage. You essentially borrow money against the equity in your home. A second mortgage is usually only a good idea if you use the money to make significant improvements to your home. It’s a bad idea if it will ultimately overburden your finances.
- A home equity line of credit (HELOC) operates similarly to a credit card. It allows you to take our money up to a present limit, make payments, and take out money again. A HELOC allows a borrower to tap into the credit line as needed, instead of receiving a lump sum loan all at once.
Accessible Financing When You Need It Most
At Perma Pier, we understand how urgent foundation issues are. Finances should never have to stop you from making an incredibly important fix to your home. That’s why we’re proud to offer accessible payment plans and our “Fund at Close” program.
We’re eager to help you navigate the financial aspect of foundation repairs. Contact our team to learn more about how we can help your Texas foundation repair.