5 Steps for Applying for A Pool Financing



Splashing around and luxuriating in a backyard swimming pool on a sweltering summer day does sound nice — almost like a dream come true. But this luxury comes with an exorbitant price tag, which might leave your banks drained. So, how are you planning to finance a lavish pool project?

There is a plethora of ways to manage a budget of this magnitude, including the obvious swimming pool loans. But one reckless decision might be enough to plunge yourself into a sinkhole of never-ending debts. Understand all your available options and the technicalities behind them can help you make a better decision. Now the question is what are the ways and steps to apply for financing a pool? Read on to find out everything you need to know about it.

Determine How Much A Swimming Cost


You might have already searched it on the internet a couple of times only to find out varying information with a wide price spectrum. For financing a pool, you need more specific and authentic information to rely on. The price depends on a myriad of options — everything from pool type, size, features, design, etc. are contributing factors that derive the final cost. With so many factors in play, you shouldn’t be surprised to find a price spectrum instead of a tag.

The cost for a basic inground pool ranges from $25,000 and reaches up to $100,000, even more for highly luxurious demands. The cheapest option would be small vinyl and concrete pools, the complete construction of which can be achieved within $20,000 to $60,000 on average.

Choose A Suitable Way of Financing A Pool


Out of plenty of ways, here we have mentioned a bunch of them. Let’s have a look at how you can get money for financing a pool.

1. Home Equity Line of Credit


Undoubtedly, HELOC is the most preferred way for financing a pool, in which a customer utilizes the home’s equity as collateral. The amount of loan you will receive depends on the overall value of your property and also on the paid mortgage amount. For instance, if your property is worth $200,000 and the remaining mortgage is $150,000 then the equity will be (200,000 – 150,000) $50,000. And you will receive the HELOC depending on the bank’s policy. Most of the service providers give out 70 to80 percent of the equity, which is more than enough for constructing a sumptuous swimming pool.

2. Secondary Mortgage


Just like HELOC, the secondary mortgage demands your home’s equity as collateral. The only difference between the aforesaid methods is the way you obtain the loan. The payment isn’t treated like credits and is given out in one lump sum after the approval. Both are effective ways of financing a pool, but HELOC comes with low-interest rates.

3. Unsecured Pool Loan


For an unsecured pool loan, you don’t need to use your property as collateral, which is a huge relief. Instead, you will get the payment according to your current debit-to-credit ratio and the overall credit score. But the thing that might put you off is the incredibly high-interest rate, starting from 7% and can also go way higher than that. That is why many people consider this type of loan as quicksand, which slowly devours the customers.

If you are interested in an unsecured pool loan, make sure you are consulting with reputable lenders having feasible policies. Otherwise, it would be backbreaking to pay off this debt.

4. Credit Cards for Financing A Pool


Amongst savvy buyers using credit cards for financing a pool is prevalent. And they enjoy rewards in the form of double cash, flyer miles, and even double points. However, clients only use this method when they have enough cash stocked away to pay it off right away. Horrendous consequence awaits the client if he fails to immediately settle the score. For example, he would have to face a compounding interest rate for a long time.

Decide How Much to Borrow


How much loan you are willing to take depends on personal preference. Ask yourself how bad do you want a backyard oasis? Since you can’t recoup much value from your swimming pool after the investment, it is only considered a luxurious item. The more you spend, the more high-end will be the results. But that doesn’t mean you can’t save money and stick to the bare minimum features. Before financing a pool, get a rough estimate from the construction company to make things clearer.

In addition to that, research on reputable lenders of the industry that provide excellent value services to ensure that you are not tricked into accepting steep interest rates or unfavorable terms.

Consider the Interest Rate


Some may not realize how big of an investment this is until they are stuck with never-ending monthly interest payments. It halts your other financial goals as your income is cut by a certain portion. So, make sure you are willing to take on a colossal financial challenge for just a luxury item.

Before finalizing a decision, consider how much the interest rate fits your monthly budget for smoothly paying off the debt. This is just to ensure that you don’t settle on unreasonable interest rates that might destroy your financial status. It is much better not to have a swimming pool than settling on an interest rate that overpowers your budget.

You may get seduced by the false impression of paying off a huge interest from a small income by saving money, which is nothing but a marketing tactic to ensnare clients. So, don’t make any unwise decision today that you might end up regretting later.

Submitting the Application


To avail any of the aforementioned loans, burrowers' information — driver’s license number, social security number, gross income, current employer, and more — is essential for the application process. You can either fill the form online or by visiting their nearest office in person, depending on the lender’s setup. After submitting the application and other verifications, you usually receive the approval within a few days.

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