Don’t be put off by the high price of a new swimming pool. Even if you don’t have all the money just laying around, you can still find a way to build the swimming pool of your dreams. The addition could even increase your home’s resale value! Let’s look at a few options for financing a swimming pool.
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Financing Options
Financing a swimming pool starts with deciding which style of pool you want. Once you know the ultimate price tag and the annual maintenance costs, it’s time to put money down on the project. Pool loans can take many forms, but these are the best choices for most homeowners:
- Unsecured pool loans
- Home equity loans
- Home equity lines of credit
- Cash-out refinancing
1) Unsecured Pool Loans
A “pool loan” is simply a personal loan. However, because it is an unsecured loan, lenders are more reluctant to grant one and often charge significantly higher interest fees. Additionally, the maximum allowable amount for a personal loan is usually far too low to cover a swimming pool project. Unless you’re building a very small pool, an unsecured pool loan is not your best choice.
2) Home Equity Loans
A home equity loan, sometimes called a second mortgage, allows you to borrow a lump sum of money at a predetermined interest rate. You generally have around 10 years to repay the loan. While this does keep your interest payments low, it also means that once you’ve taken out the loan, any additional pool expenses (such as additional pool features) come out of your pocket or require a second loan.
3) Home Equity Lines of Credit
Also known as a HELOC, this type of loan works like a secured credit card. You need only to make payments or withdrawals as you need the money. While a HELOC can bring some additional fees, some lenders will allow you to pay interest at a fixed rate to minimize surprise costs.
Pro Tip: A home equity loan or line of credit often comes with tax-deductible interest! When you apply for a swimming pool loan, see what potential savings your lender offers.
4) Cash-Out Refinancing
This loan adds the required amount onto your home mortgage, allowing you to pay for the pool almost immediately. While this is perhaps one of the simpler financing methods, you do have to meet stricter standards to qualify and will often pay higher interest rates. This is the best choice if your project is time-sensitive. If you can wait a little while, try another method.
Paying for Your Swimming Pool
The high price of a pool shouldn’t be the reason you give up on what you want. With a little strategic financing of your swimming pool, you can still afford to add this valuable feature to your home and enjoy it for years to come.
Connect with us to learn more about planning and purchasing a new pool.