Pulling the Curtain Back on Home Improvement Financing


Pulling the Curtain Back on Home Improvement FinancingAre you loving the idea of installing new windows in your home, but aren’t sure if you have the money to do it? Let’s say you’re finally ready to pull the trigger on those new home fiberglass windows you’ve been thinking about.

The timing is perfect: cold winter storms will soon be replaced by spring’s warm embrace. Before you know it, the brutal heat of summer will engulf your home while trying its best to roast you inside like a turkey in an oven. You’ll hardly notice, however, because you’ll be sitting behind your new energy-efficient windows as you sip an iced tea.

There’s just one problem. How are you going to pay a contractor to install those windows today if you don’t have the capital to pay for them upfront?

Because They Don’t Take American Express

As a homeowner, you might not be aware that contractors aren’t exactly built – from a transactional standpoint – the same as retail outlets. What I mean is that contractors aren’t really set up to receive payments via credit cards; most of the time they can only accept cash or checks from you. Heck, even some of the biggest contractors in your town can’t process credit cards – and almost no one takes American Express.

For those few contractors that do process credit cards, they will have to add 3% to the total cost of the project. Is your contractor ripping you off? Is there some magical credit card transactional fairy you’re paying for? Not in the least. Your contractor will be charged a 3% convenience fee from credit card companies, so naturally this gets passed along to you. So if your window project cost 10K you can plan to add 3% to it. If a contractor has a 20% discount available, expect to receive only 17%.

Enter A Home Improvement Banking Option Like EnerBank

Because it’s so difficult for contractors to get paid if you aren’t paying with cash or a check, they turn to third parties for financing assistance. One of the available options is EnerBank.

EnerBank has a program in place where they pretend to be a part of the contractor’s business. They will chat with you over the phone, finance the project, and give you an authorization code. Once your project is complete, you are then left with a personal loan. These FDIC protected loans are usually from banks you’ve never heard of.

Most of these loans will feature 90-day or 12-18 months same-as-cash. You’ve probably had financing like this before for a new bed or TV. You pay off your balance in time and the interest is waived. Seems pretty cool, right? The problem is that the contractor has to uplift the cost of your project to offer you this type of financing. The fees can range between 5-11% and are added upfront to the project. So yes, you may pay it off early and feel like you’ve saved on the interest, but in reality you’ve still paid more for your project – you just did so upfront. Also, keep in mind that with the cost of home improvement projects currently at the lowest in quite some time, financing may still be a great option for you when you take a look at the big picture. You just need to be aware of the reality of doing business this way with a contractor.

In the end, financing might not be so bad if banks will approve you.

What Does It All Mean?

These financing options are legit and viable so long as you understand what you’re getting into ahead of time. If your Bay Windows have sprung a leak and you’re desperate to replace them, then by all means take advantage of these financing options – just know that you’ll be spending more either pre-fee or post-interest. Also note that you’ll need to make sure upfront that the contractor you’re working with is actually able to provide financing options.

You can also speak with your contractor about layaway. I’ve noticed that even our own network of contractors rarely offer this option. Plus, with so many contractors out there routinely going out of business, you’d want to work with experienced consultants at HomeProHub to make sure this option – and any other financing choices – is right for you.

Financing windows can be a bit tricky endeavor. Contact us today for a free consultation. We’ll make sure you take advantage of the best option for your home.

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