It is possible that several homeowners are interested in building a swimming pool at their homes, but they usually give up when they start checking prices and they think they will not be able to finance a pool. However, financing a pool does not have to be that difficult; some people even consider getting a personal loan to take care of the costs of building a pool.
There are different options that will allow you to build a swimming pool while you add to your home’s value. Continue reading to know how to afford building a pool and provide your family with years of fun. Also keep in mind that when you have a pool, you may find that mosquitos are attracted to the pool since they lay eggs in bodies of water.
Can You Finance a Pool?
Despite the type of pool will determine its cost, but according to research, the average pool installation costs around $25, 224. To be more specific, above-ground pools cost from $1,500 to $15,000 while in-ground pools are more expensive, ranging from $35,000 to $65,000.
Nevertheless, these prices will vary depending on the type of swimming pool you are looking for. The features as the material you choose, such as vinyl, concrete, or fiberglass, the size, the installation, and any extras such as diving board, hot tub, fences, etc. will determine the final cost. Moreover, maintenance is another factor to consider, which will also vary depending on the pool type. Maintenance cost between $500 to $4,000 per year. To receive advice and see your possible options, ask for a free pool build consultation.
Find the Best Way to Finance a Pool
Homeowners who are interested in how to afford building a pool should know there is more than one way to pursue it. Therefore, once they determine a pool design and how much of it they can afford, they can start considering the different options available to finance a pool.
Although personal loans are quick and inexpensive to process, they usually finance up to $100,000 and might come with high-interest rates, depending on your credit history. On the other hand, when it comes to secured loans, home equity lines of credit, cash-out refinances, and home equity loans might be good options. Depending on your particular situation, their pros and cons can be beneficial or disadvantageous.
However, whichever method you decide, keep in mind that choosing to finance a pool with credit cards will definitely be the worst option.
Home Equity Lines of Credit (HELOC)
This loan works as a secured credit card where the lender uses your house as collateral instead of a required money amount in a bank account. To determine your credit limit, the lender considers your credit history, debt, income, and home’s appraised value.
With this loan, you will receive a credit card or a set of blank checks, and you will be able to withdraw the money you need as you need it. This is highly convenient as you only have to make the minimum payment every month and you are even able to minimize the interest or obtain a fixed rate under some circumstances. Nevertheless, the multiple fees associated with the loan are a possible downside. For instance, you must pay for an application fee, a new property appraisal, and closing costs.
How to afford building a pool with a cash-back refinance? Cash-out or cash-back refinances include acquiring a new mortgage for more than the current outstanding balance, and you receive as cash the difference between the old and the new loans.
Generally, these loan interest rates are higher than in a HELOC or a home equity loan due to lenders considering this type of loan a higher risk; therefore, qualifying criteria tends to be strict. However, as in other loans, these interest rates can be fixed under some circumstances. Furthermore, the interest paid in this loan might be tax deductible for home improvements, just like in the HELOC and the home equity loan.
Home Equity Loans
Another method on how to afford building a pool is by using a home equity loan. This loan consists of a single payment that you must repay in 10 to 15 years at a fixed interest rate. Although it is possible you have to pay associated fees; however, they are usually lower than those for a cash-out refinance. Some of the advantages you can find in home equity loans is that interest rates are usually lower than those for personal loans and they are often tax-deductible. Nevertheless, borrowing and paying interest on a single, large amount may represent a disadvantage.