How to Pay for a New Roof, Siding or Windows in Northern Virginia: Financing Options Explained

There are four common ways to pay for a new roof, siding or windows in Northern Virginia: from savings by check or credit card, with an unsecured home improvement loan, by borrowing against the house with a home equity loan or HELOC, or with financing the contractor arranges. Whichever you choose, get a firm written price first, then compare the total cost of each option, not just the payment.

We are Sunshine Contracting, a family-owned exterior remodeler in Woodbridge, and we have been replacing roofs, siding and windows across Northern Virginia for 33+ years. The guidance below comes from the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC). We leave out rates because they change and depend on your credit.

Home improvement loan, HELOC, card or cash: which is better?

No one option is best for everyone. The biggest difference is whether your house backs the debt. With a secured loan, the CFPB’s glossary explains, if you cannot pay, “the lender takes your collateral to get their money back.”

Unsecured home improvement loan

An unsecured loan does not use your house as collateral, so no lien is placed on your home and there is usually no appraisal. The CFPB notes that lenders see these loans as riskier, “so they may charge a higher rate of interest for them.” It can make sense if you have little equity or would rather not borrow against the house.

Home equity loan or HELOC

Both borrow against your equity: your home’s value minus what you owe on the mortgage. A home equity loan pays one lump sum. A HELOC is a credit line you can draw from more than once, usually at an adjustable rate. Because the house is collateral, the CFPB’s booklet on home equity lines of credit says their rates are “generally lower than rates for other types of credit.”

For a HELOC, the CFPB says set-up costs are similar to a mortgage’s: an appraisal fee, an application fee, points and closing costs. Ask a home equity loan lender for its set-up costs too. If you sell the house, you will probably have to pay off a home equity line right away. And in the words of the CFPB’s HELOC explainer, “If you fall behind or can’t repay the loan on schedule, you could lose your home.”

Contractor financing and project cards

Contractors, us included, often help arrange a loan or project card. That is convenient, but the FTC advises: “Never agree to financing through your contractor without shopping around and comparing loan terms.”

Some card offers use deferred interest: it is figured from the purchase date, and you pay none of it only if the whole promotional balance is paid off by the deadline. If any balance is left, the CFPB says you “would owe all of the interest back to the original date of the charge,” and minimum payments alone probably will not clear it in time.

Savings, check or credit card

Savings means no loan fees, and many smaller jobs, like a new door, are simply paid outright. However you pay, the FTC advises against paying the full amount up front or making the final payment before the work is done and you are satisfied.

Does prequalifying for a loan hurt my credit score?

Not when the lender uses a soft inquiry. The CFPB explains that soft inquiries “will not affect your credit scores.” Hard inquiries are often made by lenders after you apply for credit, and they “will impact your credit score” because most scoring models look at how recently and how often you apply.

When a lender says you can prequalify “with no impact to your credit,” the check works like a soft inquiry and does not affect your scores. Prequalifying is not approval, and the full application may involve a hard inquiry, so ask which check each step uses.

What should I ask a lender before I sign?

• What is the APR? The CFPB says the APR “is the interest rate plus any additional fees charged by the lender.” Compare APR to APR. A HELOC’s APR leaves out points and other charges, so compare those separately.
• Is the interest deferred? If so, what happens to a balance left on the end date, and what must I pay each month to clear it in time?
• Is there a prepayment penalty? That is a fee some lenders charge for paying off all or part of a loan early.
• Is my house the collateral, and can the rate change?
• What will I pay in total? Add every payment plus application, appraisal, closing and annual fees. The FTC says never agree to a loan “without understanding the terms of the loan and knowing whether you can make the payments.”

How does paying for a project work with Sunshine Contracting?

First, we give you a free estimate with a firm written price, so you know the project cost before you think about financing. For a sense of the numbers beforehand, see our guides to roof replacement cost, siding replacement cost and replacement window cost.

Then you pick how to pay: check, credit card, your own bank, or one of the lenders we work with.

United States Senate Federal Credit Union (USSFCU)

One option our customers use is USSFCU’s unsecured home improvement loan. Here is how USSFCU describes it:

• Unsecured home improvement loan: not secured by your home, no appraisal required
• USSFCU lists no origination fees or closing costs
• Fixed rate
• Prequalify in minutes with zero impact to your credit score
• Membership eligibility through the USSFCU Foundation with a one-time, non-refundable $10 donation (USSFCU’s normal membership application still applies)

Current rates, amounts and terms are set by USSFCU. Our financing page links to USSFCU’s prequalification page.

Synchrony

• Financing through the Synchrony Project Card, accepted at thousands of contractor locations nationwide for home improvement projects
• Ask your consultant what Synchrony currently offers

Medallion Bank

• A project loan arranged through us; Medallion Bank makes the credit decision
• Your consultant sends you the application link

These are some of our financing options, not all of them. If you have questions about different financing options, just call (703) 499-8654.

Sunshine Contracting is a licensed contractor (Virginia Class A license #2705075333 and Maryland MHIC license #05-131843), not a lender. We do not make credit decisions, and all financing is subject to credit approval. We have worked for 30,000+ homeowners, and our customers rate us 4.9 on GuildQuality.

See all of our financing options, or request your free estimate and get a firm written price to plan around.

Financing questions we hear often

Can I finance a new roof without using my home’s equity?

Yes. An unsecured home improvement loan is not secured by your house, so no lien is placed on your home and there is usually no appraisal. One option our customers use is USSFCU’s unsecured home improvement loan, and USSFCU says you can prequalify in minutes with zero impact to your credit score.

Is a HELOC or a home improvement loan better for siding or windows?

It depends on your equity, your credit and your plans for the house. A HELOC uses your home as collateral and often has set-up costs, but its rate is generally lower. An unsecured loan does not use your home as collateral but may carry a higher rate. Compare the APR and total cost of each.

Do I need financing lined up before I get an estimate?

No. Get the free estimate first so you have a firm written price, then decide whether to pay by check or card, use your own bank, or finance through one of the lenders we work with.