Indiana inground pool financing--“It ain’t like it used to be!” So how do people pay for a pool? Cash is good. But a loan can be helpful!
Before the great recession, there were lots of financing programs that made it easy to buy a pool. There were programs that allowed you to finance up to 125% of the value of your home; some programs would presume that the cost of your pool would add dollar for dollar to the fair market value of your house; another program would allow you to “state your income” without verification…..these features are nothing but a fairy tale today.
Today’s Indiana swimming pool loans follow a couple of standard formats with an occasional twist.
Swimming Pool Home equity loans. This loan is dependant on the equity you have in your home and requires an appraisal of your house. The more aggressive programs allow you to borrow up to 90% of the appraised value of your home less the first mortgage balance (e.g. A home appraised at $300,000 would have a maximum loan value of $270,000. If the first mortgage balance was $200,000, that means you could get a second mortgage loan of up to $70,000.)
These loans are secured by a second mortgage on your home and can be at a fixed rate or variable rate of interest. Key factors in your eligibility for one of these loans is your debt to income ratio and your credit score. Currently, the interest you pay on these loans is tax deductible. They take a few weeks to process in order to gather appropriate appraisal and title information.
As of January 2013, home equity loan rates are priced at about 4 1/4- 7 1/2% for a 10 year fixed rate or about 3 1/2-7 1/2% on a variable rate. Rates depend on credit and collateral quality.
Swimming Pool Unsecured loans. Unsecured loans are not collateralized and your eligibility depends solely on such factors as your debt to income ratio and credit score for repayment. The lack of collateral also means that the interest rate is higher due to the lack of collateral. The interest on these unsecured loans is not tax deductible which also makes these loans more expensive. Often, these loans are capped at $25,000, except for high wealth individuals. The processing time is fairly quick, closing costs are low and these loans generally can be prepaid at any time.
As of January 2013, one lender quoted this author a 7 1/2-13% rate on a 5 year loan and the same on a variable rate loan. A final rate would be dependant on your credit score and debt to income ratio and other factors.
Special Pool Loan Deals. Perma has a special pool loan deal that it is currently (4/3/13) passing on to its customers from a local lender. It is an unsecured loan for 80% of the purchase price of a pool. The interest rate can be as low as 6 1/2% (fixed for up to 12 years) but depends greatly on income, debt to income ratio and credit score. This loan can be approved in a week from application and closed shortly thereafter if all goes well. Hopefully this deal will hang around for the season. Perhaps there will be other deals that will arise also.
Getting good service on an Indiana swimming pool loan. Most Indianapolis lenders offer both home equity and unsecured loans but sometimes it can be hard to get to the right person to talk to. If you have a good banking relationship, that should help. Otherwise, it might be good to ask your pool builder for a suggestion. At Perma Pools we have established relationships with a couple of lenders to whom we repeatedly drive traffic and we do monitor their service. We choose these lenders based on their closing costs, service, and rates. Hopefully, you will be treated well and you will have a good result.
If anybody has any better ideas for financing a pool, please comment below!