The Money Pit: pitfalls to avoid when financing your repairs…
Attorney at Law
If your roof is leaking you may just need a simple repair. But if your roof is older and is leaking in multiple places Florida law may actually require you to put a whole new roof on your house. This can be dauntingly expensive.
They say the two big lies are that “you can avoid taxes,” – and “I am from the government and I’m here to help”. Well ironically the government may actually be able to help you in this particular situation and it involves your property taxes.
Depending on the material of the roof you will be replacing it can cost from $20,000-$50,000 on a regular 3 to 4 bedroom house. Now, if you’re anything like me you don’t have that money under your mattress right now. So for most homeowners the only way to get the water to stop coming in their house is to put on an entirely new roof.
Here in Florida we live in the land of eternal sunshine, and occasional hurricanes. Florida building code requires that if the repairs to the roof consist of more than 25% of the entire roof surface a whole new roof must be put on.
There are three primary ways that you can finance a new roof. The first and most ideal is through a home equity loan or HELOC a home equity line of credit. The second requires your income to be below 200% of the national poverty level and varies depending on number of people living in the household – this is called the WAP, or “weatherization assistance program”. If a home equity loan is not an option for you, and your income doesn’t qualify you for the WAP program another option is the PACE program. While PACE has been controversial, it can be an excellent option- potentially even in the short term if you are anticipating a claim or settlement from your insurance company. Be forewarned, however, and do YOUR OWN due diligence in reviewing the terms, interest rate, & payback costs.
We also strongly advise our clients to get multiple estimates from multiple contractors and pick your contractor yourself based on price, recommendations & your own comfort level.
While a PACE loan can be approved very quickly, and have payback lengths of up to 30 years, the rates do tend to be higher than the typical home equity rates.
A PACE loan is attached to your home as a lien & gets added yearly to your property tax bill. So be forewarned, if you try to sell your home, the PACE loan will take precedence & may reduce your home sale ability.
As an example- a 30 year PACE loan for $20,000 (on a mortgage that collects taxes monthly as part of your mortgage payment) will cause your payment to go up about $180 per month. BUT at the end of 30 years you will have paid about $43,000 for that loan.
Contact our office if you need help sorting through your options or assistance with your home repair claim. It is what we do, and we are here for you at any step of the process.