A residential accessory building such as a detached garage, workshop, or barn is a great option when you need more storage space or living space. These buildings can also add property value and make your home more marketable when it comes time to sell. Many people believe their dream building is out of their price range, but more often than not, there are great financing options available that can make your ideal man cave or she shed affordable. It might be a good idea to finance your project if you have equity in your home that can be tapped into, if you have a solid credit score that can get you a competitive interest rate, and if you have a plan to pay back the debt. Below are a few options you have when financing a pole building.
A secured loan is a loan backed by collateral. Most often this collateral is your home or car, but really, it can be any kind of financial asset you own. If you don’t follow the terms in your agreement with the lender and pay back the loan, the bank can seize your collateral as payment. Because your assets can be seized, secured loans are arguably risker than unsecured loans. However, they often come with much better interest rates, especially if you have a good credit score, and you can borrow larger amounts of money.
Home Equity Lines of Credit (HELOCs)
One type of secured loan is a Home Equity Line of Credit (HELOC). Equity is the difference between what you owe on your mortgage and what your home is currently worth. HELOCs are a great option for homeowners that want to add a detached structure to their property, or really make any substantial home improvements or additions. In most cases, you have 10 years to continually borrow from your line. Many HELOCs come with repayment plans for up to 20 years. Payments may vary based on current interest rates. They give you a line of credit, essentially like a credit card, to pull from, based on the amount of equity you have in your home.
HELOCs are great options for people that have great credit, are almost done paying off their home, and are engaging in a project that will require multiple payments over a period of time.
Home Equity Loan
Like a HELOC, a home equity loan uses the equity you have built up in your house (hence the name). However, unlike a HELOC, a home equity loan is an installment loan, meaning you receive all of your funds at once instead of on-demand, and make payments in equal monthly installments right away. Your interest rate and monthly payment will never change.
A home equity loan is a good option for people that need all of their funds upfront, have a substantial amount of equity in their home, and prefer a fixed monthly payment.
We recommend a home equity loans to many of our customers that need financing. We have a special partnership with Heartland Bank, a local Central Ohio bank that offers home equity products. After an initial discussion with your KBSI representative, we can help you talk to our contact Lori Rech and get you started with a pre-qualification same day, $0 down!
An unsecured loan requires no collateral, though you are still charged interest and usually some sort of fee. Since there is no collateral, financial institutions give out unsecured loans primarily based on your credit score and history of repaying debts. For this reason, unsecured loans usually have higher interest rates than secured loans. One example of an unsecured loan is a personal loan.
You can take out a personal loan for almost any reason. The process to get a personal loan is often very quick, and you can receive money in as little as just a few days. Many personal loans come with repayment terms of one to ten years. Because interest rates for personal loans are largely based on credit score, they might not be a great option for people that have less than stellar credit.
A personal loan is good option for people that don’t want to use their home as collateral, need money quickly, and have a solid credit score or a co-signer with good credit.
We are partnered with Acorn Finance, which offers unsecured loans specifically for pole buildings! You can check if you pre-qualify without affecting your credit score here. You can view offers from multiple different lenders, and you can select an offer you like. Once approved, and can receive your money via direct deposit in just 1-2 business day!
How do I start financing?
Before you accept a financing offer, we recommend doing a few things. Before you reach out to a lender, make sure you calculate your entire project cost, give building plans to your lender, and determine how much of a down payment you’re willing to make. Make sure you interview multiple lenders to get the best rate.
Ready to build?
If you believe you can’t afford the pole building of your dreams, KBSI can help connect you with a lender that can make it possible. Give us a call at 740-548-7810 for a free quote and consultation.