3 Ways to Finance Your Pool
When deciding to put a pool in your backyard, one of your concerns might be how to pay for it. A swimming pool is an investment in the value of your home. It is very common to finance your pool, and there are many great financing options available to you. This post will explain the benefits of three different methods you can use to finance your pool.
A personal loan for your swimming pool
Using a personal loan to finance your pool might be the most straightforward way to do it. Maybe you’ve taken out a personal loan before and are familiar with the process. If you’re not, a personal loan means borrowing a sum of money from a financing company, bank or elsewhere and paying the amount back with interest over time. Personal loans often have lower interest rates than you would get if you paid for your pool on a credit card, so in the long run, personal loans are often better than credit. Additionally, paying back a loan on time will build your credit and establish you as a responsible borrower.
The personal method is a great option for people who don’t have a whole lot of established credit, people looking for a simple option, or people who don’t have equity in their home, which the next options rely on to secure financing.
A home equity loan
This method will let you finance your pool by borrowing a specific sum of money for a set term at a variable rate, much like a loan. However, you can generally take out more money through this method than with a personal loan because you use your house as equity. Also home equity loans may have a lower interest rate than personal loans. Your home’s equity is the collateral that guarantees the loan will be paid back. Home equity loans often work like a line of credit. The line of credit is opened for you and you can use the money like you qould use money in a checking account. You only pay interest on the money you use. Typically, there are 15-year repayment plans, and the closing costs associated with this method are much cheaper than with other options. This is a good option for making big purchases because of the high credit limit, and it will work well for those with good equity and credit. Also you may be able to deduct the interest if you use the funds for home improvements such as a pool.
A cash-out refinance loan
This method works by taking out a loan, the amount of which is fixed onto your mortgage payment, and paying it back with the rest of your mortgage. It’s a mortgage-refinancing plan, so you simply refinance your mortgage payment for more than you currently owe, and you take the difference. You get the cash right away, and with this method you can get quite a tidy sum, but you still have to pay it back with interest, just like the rest of your mortgage. This is a replacement for your first mortgage, not an additional loan separate from it. This is a good method for people who want a relatively simple way to withdraw a big sum of money without taking out another loan. It is also a good method if you can refinance and lower your interest rate. If that is the case, you might find that you refinancing is actually offsetting the price of the pool.
There are lots of ways you can finance your pool, and these are only a few options that might help you get started. Buying a pool is exciting, and it doesn’t have to be financially daunting or put you into debt. Financing options are widely available, so talk to your banker or a financial agent to decide what method works best for you.