8 Options for Siding Financing
Having new siding installed can enhance both the look and energy efficiency of your house, however it may be expensive to fund. The amount it takes to side a dwelling can vary from as little as $5,300 to as much as $16,000, based on HomeAdvisor, a resource for house improvement services. The exact expense will depend on where you are located and the type of material you opt for.
We will examine some common financing solutions that could be useful if you are searching for ways to finance new siding. Additionally, we will offer an instructional manual on the various kinds of siding, to assist you in choosing the optimal material for your house remodel.
8 Options for Siding Financing
1. Cash-out refinance
A cash-out refinance is a phrase that refers to when you replace your existing mortgage with a new one, using the funds from the new loan to pay off the original loan. The current mortgage is bigger than what you owe on your present loan, and you get the extra funds in one payment. If you want to reduce the interest rate on your mortgage while also obtaining money for your new siding, this loan may be a good choice.
The level of interest rates can vary depending on one’s credit score and other related criteria. In order to meet the requirements, you must have enough ownership in your house, and you will also have to pay some fees at the end of the process.
2. FHA 203(k) loan
A government-sponsored mortgage loan made for people who want to purchase and renovate a property is known as an FHA 203(k) loan. You have a chance to replace your current mortgage (or buy a new home) and do house renovations simultaneously.
Things You Should Know
You can use part of the money from the loan to pay off your original home loan. The rest of the money goes into a trust account that can be used to pay for house renovations, like replacing the siding.
3. FHA Title 1
If you don’t have a large amount of value in your house, you may still be able to get up to $25,000 of siding financing with an FHA Title 1 loan. These government-sponsored mortgages can be utilized to fund improvements that will “greatly enhance the habitability and usefulness of the property,” as indicated by the U.S. Department of Housing and Urban Development. You can combine the FHA 203(k) loan with these loans if you require additional funds for eligible home improvements.
4. Home equity loan
Borrowing equity from your home, otherwise known as a “second mortgage,” might be an option to finance the installation of vinyl siding or other siding materials. You may be able to get a home equity loan that allows you to borrow up to 85% of your home’s total worth, taking away the amount you owe on your primary mortgage.
The level of interest rates you can receive is usually predetermined and can be favourable depending on the state of your credit score and other considerations. If you fail to pay back the loan as agreed, you could lose ownership of your house due to repossession.
5. HELOC
Home equity lines of credit and home equity loans are alike in that they both involve taking out money using the equity in one’s house as collateral. You can access money multiple times while the HELOC is still open and in good condition during the designated draw period.
Interest rates on Home Equity Lines of Credit usually fluctuate, but if your credit record is good, they may still be reasonable. One of the downsides to HELOCs is that they may include a penalty for paying off the loan early, and if you don’t make payments, you may risk losing your house.
6. Personal loan
Personal loans have a fixed interest rate and must be paid back over a predetermined duration. They can be employed for a variety of tasks, such as putting up siding for house repairs. The amount of money you can obtain from a lender might range anywhere from $1,000 to $50,000, or even more.
Your credit rating and the proportion of your income that goes towards debt can both be important when it comes to meeting the requirements for this kind of lending. Moreover, these factors can also have an influence on the rate of interest, charges, and conditions of the loan. For instance, while having a bad credit score could still permit you to be eligible for a personal loan, you should be prepared to pay a higher rate.
7. Contractor financing
The contractor you employ may provide a package deal which includes funding for your home siding renovation. The contractor does not give you the funds directly, but instead has an affiliation with a loan provider that might hasten the borrowing process.
A contractor loan may include an interest-free period as an extra advantage. It is essential to look into whether the loan provider will cancel the interest or just put it off if you settle the debt before the promotional period is finished if an interest-free stretch is available.
8. Credit card
Credit cards offer a high degree of financial flexibility. Simultaneously, credit card debt could be very costly and could have a detrimental effect on your credit rating.
Comparing Siding Types
Vinyl Siding
The search for economical and easy-to-maintain siding led to the emergence of vinyl siding, following aluminum and steel siding. By the late 1960s, vinyl had become a widely available material and now, around a third of all households in America are clad in some sort of vinyl siding product – either horizontal boards or shakes/shingles. Vinyl is available in various forms, such as horizontal and vertical boards, and in a vast selection of colors and textures.
Installation
Vinyl siding is usually put on top of existing wood siding as an update. When retrofitting this type of siding to existing buildings, it is usually necessary to put a layer of fiber panels beneath the boards. This will add insulation to the walls. Correct installation is essential, or else the siding will deform or buckle. Vinyl siding is similar to aluminum in that it is made of strips that join together at the edges. A specific device known as a zip tool is utilized to attach and detach the siding strips.
Cost
Vinyl siding is not only easy to put in place, but it is also the most cost-effective among contemporary siding selections. The typical cost to cover a surface with vinyl siding, when you consider both the materials and the labor, is somewhere between three and eight dollars per square foot across the country.
Wood Siding
Wood siding, such as lap planks, shakes, and shingles, has been a popular choice for many years and is still a common choice when brick or stone is not an option. It is still one of the most appealing choices for home siding. Wood siding can come in a variety of forms including planks, boards, panels, and shingles. Wood clapboard lap siding is one of the most established kinds of exterior cladding, and you can appreciate its attractiveness in numerous old buildings. The primary disadvantages of wood siding are its costly price tag and the requirement for regular maintenance.
Wood clapboard or beveled lap siding is laid horizontally, with overlapping sections that keep water from seeping in. Wood siding which is installed vertically is available in three different styles which are board and batten, board-on-board, and channel-groove or tongue-and-groove. Plywood referred to as T1-11 is a type of board siding that is designed to look like the traditional board-and-batten style. It is made from exterior plywood with a variety of surface treatments and grooved patterns.
Installation
Putting up wooden siding necessitates a complicated process, including the addition of an insulated covering and a waterproof layer, followed by the careful nailing of boards or shingles to the house’s frame. Framing carpentry is not a difficult job, however it does take a while to complete.
Cost
Wood siding costs run from moderate to very high. Nationally, the average price of installing wood siding and exterior finish ranges from $3 to $10 per square foot, as reported by a large consumer cost estimation agency. The final cost depends on the kind of wood used and the style of siding and exterior finish. The most economical type of T1-11, on average, is $3.50 to $7.20 per square foot when it has been put in place. Cedar shingles/shakes cost the most, typically ranging from $6.50 to $13.75 per square foot when installed.
Lap siding can cost anywhere from approximately $2 to $14 per square foot, depending on the type of wood chosen, with pine or cypress being the least expensive and redwood the priciest. The most widespread type of cedar lap siding generally costs between $5 and $10 per square foot when it is put in.
Metal Siding: Aluminum and Steel
Due to the high cost of upkeep and the limited amount of quality wood applicable for siding, metal was one of the first substitute siding materials available, becoming fashionable in the mid-twentieth century. Up to the present, aluminum and steel are both regularly utilized to manufacture both lap siding boards and multiple types of shingle/shake siding items. Aluminum siding was the first type to meet the requirements, and it has been continuously updated and improved since then, making it a very desirable and low-maintenance choice for modern homes. In recent times, the accessibility of inexpensive foreign steel has caused the rise of steel siding.
Aluminum and steel siding that imitates wood lap siding is available in horizontal strips. The top of each strip has a mounting flange and the bottom has an interlocking edge to protect against the elements. It can be difficult to tell the difference between metal siding and wood siding, especially when viewed from afar. This type of siding usually has a finish that is applied in a factory setting to give it maximum protection against corrosion. Unpainted and unprocessed steel sheets are typically treated with galvanization to guard against corrosion. Newer items often feature coatings of plastic or vinyl that give them protection from fading and deterioration caused by the weather.
Installation
Metal is usually chosen as the material for “retrofit” siding, with preference given to it over wood siding if the need for little upkeep is more important than the look, or if the wood siding has been extremely harmed. When this type of siding is put on existing structures, usually a layer of fiber panels are added to the walls to increase insulation.
Cost
Uncoated steel and aluminum are moderate in cost. The range of prices for aluminum and steel, when taking materials and installation into account, is $3 to $6 per square foot and $4 to $8 per square foot respectively. Vinyl- or plastic-coated aluminum is more expensive. The cost of materials can vary drastically depending on external factors such as the state of the market and any applicable tariffs.
Fiber Cement Siding
Fiber cement siding has become a very trendy choice, as it requires little upkeep and is made from Portland cement and a variety of natural wood fibers. Because it is made from recyclable materials, it’s resource-efficient. Fiber cement siding cuts and installs like wood siding. Major producers of this item include Allura, James Hardie Building Products (also known as Hardie board siding), and Cemplank.
Fiber cement comes very close to replicating the look of natural wood grain and is almost impossible to tell apart from certain types of wood siding. It comes with a basic coat of paint that can be changed to any hue you choose, or as fully finished items. Ornamental mouldings and carpentry work are also available to give the house a stylish look. It can be purchased in various styles, such as beveled lap siding planks, shingles or shakes, or stucco-panel designs.
Installation
Fiber cement siding can be installed in the same manner as regular wooden siding; it can be cut with common carpentry tools and attached to the insulation and house wrap on the frame. The installation of fiber cement siding takes longer than for vinyl siding, however the job is not challenging and any carpenter who is knowledgeable with wood siding should be able to install it with ease.
Cost
Fiber cement is a moderately expensive siding option. The cost of installation across the country is usually around $10 per square foot. Fiber cement siding is more expensive than vinyl or metal, however, it is a very durable material that could potentially last you an entire lifetime if you never need to replace it while you are a homeowner.
Steps to Take Before Making a Siding Financing Choice
- GET MULTIPLE QUOTES. As you shop around for contractors, be sure to get quotes from several different companies. You’ll usually want to have a minimum of three quotes to get a good sense of what the job should cost.
- COMPARE WHAT’S INCLUDED IN EACH PRICE. Ensure each quote provides you with a breakdown of everything that’s included in the price, such as labor, materials and the estimated time of completion. Feel free to inquire about all the different material options you’re interested in to get an idea of what might fit within your budget.
- CHECK REFERENCES. Going online to check out a company’s reviews is a good start, but getting actual references from real customers will put you ahead of the game. This can provide some reassurance that the company has done good work in the past and had the customer satisfaction to back it up. If you find that a neighbor has used a particular contractor, you can even see their work in person.
- WATCH FOR RED FLAGS. The Better Business Bureau advises you to watch out for contractor scams, which can involve paying a lot of money upfront and having the contractor disappear when it comes time to get started. The BBB website says there are certain things to watch out for, such as “cash-only deals” and “high upfront payments.” It’s also important to work only with contractors who are licensed, insured and have proper work permits.
- BE WISE ABOUT THE TYPE OF FINANCING YOU CHOOSE. Marina Vaamonde, a real estate investor and founder of HouseCashin, recommends covering your siding replacement with a financing option that uses your house as collateral. These options give you the best interest rates and the longest amortization, and the interest is possibly tax deductible.
- CONSIDER PAYING CASH, IF POSSIBLE. The U.S. Department of Housing and Urban Development (HUD) encourages homeowners to pay cash for home improvements whenever possible. However, if you can’t afford to cover the cost of improvement or repairs out of your own pocket, delaying the work could be more expensive in the long run in some situations.
