Currently, homeowners end up spending up to $55,000 on pool construction. Fortunately, pools provide a return on investment. In residential pools, the home’s value increases, and when selling the house, you can recover the money. Often, homeowners lack money for pool construction beforehand and opt to apply for a pool loan. Before this, they have to ensure that the pool will be worth it in the long run. If not, it is advisable to save up money instead of borrowing from pool financing companies.
How does swimming pool financing work?
Pool financing relies on the type of loan you choose. Two of the significant loan options to cater for pool construction costs are personal and home equity loans.
How much does a swimming pool cost?
Pool installation costs vary depending on the material, shape, and size of the pool. Fiberglass pools price ranges from $15,000 to $25,000. Vinyl-lined pools costs vary from $1,500 to $5,000, and concrete and granite pools price lie within a range of $20,000 to $55,000.
More upfront costs to consider
Besides installation and construction costs, you ought to factor in conservation and safety expenses in your budget. Some of the additional costs resulting from:
Fencing. Most states authorize pool fencing guidelines for safety purposes. Pool fencing is expensive, although it depends on the type of fencing implemented.
Features. Adding on additional features like a hot tub, pool lights, fire features, pool automation, a pool cover and other options will all add to the overall price of the pool and should be appropriately budgeted for.
Construction costs. During pool building, you may encounter problems such as the existence of large rocks and water lines. Consequently, you end up paying for more than budgeted.
Insurance. Upon pool construction, you will have to register for home insurance. Most insurance companies don’t provide favorable premium plans.
Don’t forget about maintenance
Pool expenses do not end after the completion of pool construction. Keep in mind you will incur costs for maintenance. Occasionally, one has to pay a fee on a monthly or yearly basis.
Moreover, you will incur costs on filtration systems, sanitizing chemicals, among other purifying agents.
Can I qualify for a pool loan?
In most cases, pool lenders look for individuals with:
Good or excellent credit. Pool lenders qualify you for a loan if you have a high credit score of more than 700.
A steady source of income. Once you apply for a loan, pool lenders assess all your income sources. Preferably, you should have high and consistent annual earnings. Most pool lenders will qualify you if you make a minimum of $25,000 in a year.
Low debt-to-income ratio. Your debt-to-income ratio should not exceed 45%. You stand a better chance of getting a good loan deal when the debt-to-income ratio is more economical.
US citizenship or permanent residency. Various pool lenders qualify you only if you are a lifelong resident of the United States.
Legal age in your state. Before obtaining a loan, you must be of legal age, say 18 or 21; it depends on your country.
What features should I consider for my new pool?
It is vital to establish your pool budget before applying for a loan carefully. Some of the factors that might contribute to your budget include:
Spillover hot tubs
Additionally, purchasing the ideal pool tiles improves your backyard aesthetics. Pool tiles vary in color, material, shape, and size. But you may have to think of slip-resistant tiles to prevent any accidents. Also, shiny and colored tiles will improve the appearance of the pool. Note that in vinyl swimming pools, occasional replacement of the pool liner is necessary.
How to compare swimming pool loans
Once you decide to apply for a swimming pool loan, here are some factors to consider.
APR. Pool loan rates differ based on various pool financing companies. Ensure you obtain the most favorable option for you. Settle with the company that is most affordable for you and matches your budget.
Loan amount. Suppose you opt for a home equity loan, the money granted to you relies on your home value. It is thus essential to settle for a loan option that maximizes your credit score.
Loan term. The loan term determines the amount you’ll pay. If you take a shorter loan period, you’ll pay less than taking a longer-term. You can organize yourself so that you pay off your loan faster and keep the interest low.
Secured or unsecured. In obtaining a secured loan, letting your house serve as collateral is not the only option. You can achieve your loan using other assets, preferably a loan deposit.
When to avoid financing a swimming pool
Occasionally, obtaining a loan from a pool financing firm is not a good idea. Avoid borrowing if:
You know you will have a hard time making the monthly installments. Keep in mind that late repayments will affect your credit score, and you might end up losing your assets that serve as collateral.
You only desire to increase your home value. Conduct thorough market research and ensure that the pool will enhance your home value. Some home buyers may not know what added costs that come with a swimming pool.
Ultimately, pool financing has the potential of increasing your home value. However, research different pool loan rates and calculate your pool loan payments as well as all the anticipated costs to see what you can afford before applying for a pool loan.