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Roofing systems are one the harder things to price out when it comes to home renovations. With big, and small, companies offering roofing services, and some offering multiple options, and even multiple different ways of executing said options, price points can be all over the place when it comes to a roofing project. However, once you’ve found a reputable contractor that you’re satisfied with, the next thing you’re probably going to ask yourself is, “how am I going to pay for this?”

How Do I Pay For It?

According to the Globe and Mail, over half of Canadians have less than $10,000 set aside for emergencies. So what are Canadians doing when a problem arises with their roof system? However, interestingly enough, according to Yahoo Finance, the lower your income, the less likely you are to pay for things on credit. So if less than half of Canadians can come up with $10,000, and those who have lower incomes aren’t putting things on credit, how are Canadians paying for costly home renovations?

Well, in some circumstances, what some homeowners will do is collect quotes for their roofing project in an attempt to try and see what it is they need to save up for. There are two issues with saving up towards a roofing project – the first is that if your roof is in dire need of replacement, waiting too long to get it fixed can lead to even bigger problems such as wood rot and structural damage. Second, the cost of roofing projects fluctuate a lot, meaning that a price you get today will most likely not be accurate six months or even a year from now.

Afterwards, once these homeowners have collected some quotes, what they might do is save up an amount they deem to be reasonable for a roof, and refuse to spend above this budget. The problem with this approach is after having waited so long, is what if there are other factors such as changes in pricing throughout the roofing industry, wood rot, or even the replacement of skylights, that were not accounted for; with these potential changes to cost it might be hard to do that project correctly and fit it into this aforementioned budget. So what happens in these circumstances? Typically many consumers who want to stick rigidly to their budget will unfortunately choose a contractor who sells off of volume, and as a result has minimum qualifications to do their project correctly.

Consider this, you just saved $8000 of your hard earned money to pay for a roof outright because you don’t want any debt, and because you read a site like Homestars, you collect three quotes assuming they are going to be in that range. You get one quote for $5000, another quote for $6000, and another quote for $13,000. You discuss with your family, and decide you’re going to accept the $6000 quote because “that third quote was out to lunch! How could a roofing company even charge that?” The project is completed, everything seems to be fine, and you’re happy that you were able to pocket that other $2000 and put it towards another home renovation. Now your nest egg is pretty much depleted, but you feel comfortable knowing that you’re debt free from your home renovations. However, a year passes and you look up at your roof, and you see a shingle missing. Initially you’re panicked, but you remember that the company who sold you the roof gave you a 10 year workmanship warranty, so you decide to call the number they left you on the contract. The phone rings, and you explain to the contractor that a shingle must have blown off your roof, and the contractor responds “we don’t cover wind damage, sorry” and hangs up. Now you’ve just spent all of your savings and you’re panicking because your roof is completely exposed to the elements and you don’t have any money to afford emergency repairs. You might think this story sounds far fetched, but this story was far too common in 2018 during the windstorm that took place in Ontario.

If The Roof Is Over My Budget, Then How Should I Pay For It?

Well, if over half of Canadians do not have access to the type of money needed to do a roofing project correctly, and they don’t want to use credit to pay for their project, what should they do? This might sound forward, but I think they should reconsider how they view financing.

Let’s trail back to my story, let’s say we have $8000 saved up, and shop for quotes. You get one quote for $5000, another quote for $6000, and another quote for $13,000. However, unlike the last scenario, this time you realize that while the $13,000 quote is out of your budget, you like that this company is qualified and uses a quality product. However, because it is out of your budget, you start to get nervous and think “well maybe I’ll just shop around and see if I can get a similar company, but in my budget,” however, as you start to think this, you notice that this company offers financing options. You and your wife initially didn’t want to get into any debts, but you both agree on a payment that’s more than comfortable. While you didn’t want to really do any payments, you and your wife are actually relieved because you now have $8000 saved up that can be used towards other things, and protect your family in the case of an emergency. Unlike the last scenario though, because you went with a company that’s qualified and stands behind their work, your wife and yourself also have the piece of mind that if anything does happen, you won’t be shelling out any extra cash in order to get your project fixed.

Now, before we jump into financing everything in our lives, there are some key considerations here. The first consideration is if this company offers financing, is the loan they are giving you open ended? While not as common anymore, some companies can use closed loans that force you to stick to a term; the issue is if you get halfway through your loan and decide you want to pay it off, you’re stuck with it. An open ended loan however is set up so that at any time the borrower can pay off the full balance owing without penalty. If you decide on financing your project, it’s always smart to inquire if the company is offering closed or open ended loans.

What If The Roofing Company Doesn’t Offer Financing, or I Don’t Want To Use Their Financing Options?

Whether or not you choose to finance your project through the roofing company of your choice, it’s always good to know if they even offer financing options. This might sound forward, but this day in age, if the roofing company who is quoting you does not offer financing, that is a red flag. “Well Dan, why would that be a red flag?” The reason it’s a red flag is because this means that company doesn’t reinvest in itself enough to help it’s customers. The simple act of having financing options cost roofing companies money, and so what a lot of these smaller companies who operate on razor thin margins will do is forgo any financing in order to cut operational costs. The problem with not reinvesting in yourself by offering financing options, is that it’s also a sign that this roofing company is not reinvesting in their infrastructure enough to be around tomorrow to honor their work.

Now, if you decide that this companies financing options don’t work for you, but you still want to use them for your project, you might want to consider a personal line of credit. However, if you do go this route, you might not want to abandon that roofing companies financing options entirely – what I mean is, you might want to consider a bridge loan. What a bridge loan is, is where you take your loan from one company, and bridge it into your line of credit. Some roofing companies for example will offer promotions like no interest, no payments, for a year, and the reason you might want to consider doing this even if you already have a line of credit, is that you can typically make payments of any amount towards your loan for an entire year without any interest, and then bridge the remaining balance to your line of credit, which saves you more money in the long run.