When your customer is ready to move forward with her home improvement project, she’ll probably be looking for financing options. According to research by Discover®, only about 25% of homeowners saved cash in advance to tackle their home improvement projects. This puts you, as a contractor who offers customers financing, ahead of the pack when potential clients are searching for a contractor.
Not sure if you’re ready to offer financing? Let’s dive into the different types of financing for homeowners and take a closer look at the services we offer here at HFS Financial. That way you’ll have a better idea if it’s something you’d like to offer as a contractor.
Types of Financing for Homeowners’ Improvement Projects
When a homeowner needs financing to get started on a home improvement project, they have a few options.
Fixed Home Equity Loan
A fixed home equity loan is where a homeowner borrows a specific amount against their home equity. The biggest downside for homeowners is that they may have to put their home up and they’ll have to pay closing costs. Besides that, getting a home equity loan is time-consuming since it requires getting a home appraisal.
Home Equity Line of Credit (HELOC)
A home equity line of credit is also a loan based on your customer’s home equity. However, with a HELOC, homeowners open a line of credit based on their available equity, instead of taking a one-time loan with a set amount. Additionally, it may involve closing costs and often involves a variable interest rate. Plus, just like with a fixed home equity loan, the homeowner will need to wait through a long approval process and have their home appraised.
Home Improvement Loans
For obvious reasons, most homeowners would prefer to get a personal loan for their home improvement project. There is no need for an appraisal and it’s a faster process. They won’t have to put their home on the line. And the interest rate will be fixed.
At HFS Financial, we only offer 100% personal loans. What’s more, when you partner with us to offer financing for your contracting customers, they can get industry-leading loan terms and low fixed interest rates. In other words, the financing options you’ll be offering for your clients will be so much more attractive than their other options! Are you ready to offer financing options for your costumers? Get started today.