From damaged drywall, baseboards, and flooring to cloudy, discolored water, there are many ways to tell when the plumbing system in your Fox Valley, WI home has reached the end of its lifespan. Although some plumbing systems can last up to 70 years, most are ready for replacement after just 40 years. Unfortunately, this doesn’t mean that homeowners themselves are always prepared for replacement costs. If you’re facing the daunting task of paying for a new plumbing system, the following is everything you need to know about financing these projects.
There’s More Than One Way to Pay for Plumbing Replacement
If you’ve ever dealt with foundation issues or have had to replace your roof, you already know that aging plumbing isn’t the most expensive problem that homeowners can face. However, aging plumbing systems easily rank among the most urgent. After all, without functional plumbing, wastewater won’t reliably flow out of your living environment, and the path to fresh, potable water could be compromised. The good news is that there are many ways to pay for the labor and materials you need:
- Credit card
- Secured and unsecured personal loans
- Financing through plumbing companies
- Home equity line of credit (HELOC) loans
In some instances, it’s even possible to have these projects broken down into small, manageable phases. This way, you can gradually upgrade outdated or excessively worn plumbing features without taking on a hefty loan payment.
What About Home Warranties?
Home warranties are designed to protect homeowners from the high costs of repairing or replacing expensive home appliances and systems. However, not all home warranties cover home systems like plumbing, electrical, and HVAC. Those that do are unlikely to pay for full-on plumbing system replacements. If you have a home warranty or home service agreement that covers your plumbing system, you’ll probably find that it only covers a determined range of plumbing repairs. If some coverage is available for your project, you can use it to offset the amount that you need financing.
The Benefits and Drawbacks of Financing With a Personal Loan
Getting a personal loan to finance your plumbing replacement might be a feasible choice if your credit is good and your project costs are reasonable. Installing all-new pipes in brand-new construction is relatively easy when compared to repiping an existing building. In new construction, plumbers don’t have to deal with obstructions like drywall and insulation. With repiping projects, much of what homeowners are paying for is prep work, planning, and drywall or other repairs after new pipes have been put in.
Other factors that might impact the cost of your project include the types of materials you want, the size of your home, and the number of plumbing fixtures. If you have a large house with lots of sinks, tubs, shower heads, and water-reliant appliances, you’ll pay far more for plumbing replacement than a homeowner with a small-sized house and few plumbing fixtures.
For larger projects, unsecured and relatively easy-to-obtain loans might not be large enough for getting everything done. With a secured loan, you’ll need collateral that’s close in value to the amount of cash you’ll need. In both cases, you can expect a hard pull on your credit report and high requirements for your credit score and overall credit profile. Unsecured loans are a worthwhile choice for homeowners who don’t have much equity in their homes, aren’t willing to use their homes as collateral, and don’t have excessive plumbing charges to pay. A secured loan with an adequate limit might work well if you have real property or another asset of acceptable value to leverage.
Using Your Credit Card to Pay for Plumbing Replacement
If you have a substantial line of credit to draw upon, paying for plumbing replacement with your credit card is another funding option to consider. However, it’s important to assess the interest rate that you’ll be subject to when paying this debt back down. Using a card that has a higher-than-average interest rate could end up costing you a lot more in the long run.
Getting a Home Equity Line of Credit
A home equity line of credit or HELOC allows you to draw upon the equity that you’ve built over time. Unlike home equity loans, a HELOC won’t require you to take all your equity in one lump sum. Instead, you can take only what you need, as you need it. The biggest drawback in using a HELOC to fund your plumbing project is that it places your home on the line. If you fail to repay all the funds that you borrow in a timely fashion, your lender could foreclose. Using HELOC funding requires discipline. Although having all-new pipes can restore a homeowner’s peace of mind, you might feel uneasy until your HELOC is paid in full.
HELOC loans have lower annual percent rates (APRs) than credit cards, and if they’re used wisely, they can boost consumers’ credit scores. However, taking one will reduce your home equity stake. HELOC loans also have variable interest rates. Thus, the interest rate that you’re quoted today probably won’t be the same interest rate that you’re paying just before the line of credit is paid off.
Financing Your Plumbing Project Directly Through Your Plumber
In-house financing is another popular way to pay for major plumbing projects. Established plumbing companies are often able to forge strong relationships with outside funding institutions. These relationships give their clients access to funding options that have low-interest rates, are easy to obtain, and don’t require them to use their houses as collateral.
We’ve partnered with Greensky. On approved credit, our clients can obtain financing that covers the full costs of their major plumbing repairs. Greensky financing also comes with flexible repayment terms, reasonable interest rates, and affordable monthly payments.
The Benefits of Financing Your Plumbing Project
If you don’t have enough equity to apply for a HELOC loan and don’t have a credit card with a limit that’s sufficient for covering your plumbing replacement, you might be tempted to roll up your sleeves and tackle this herculean task on your own. However, this is the absolute worst thing that homeowners can do. Do-it-yourself (DIY) plumbing projects are rarely up to code. You won’t be able to get the work permitted, and your home won’t be able to pass lender-required inspections if you ever choose to sell. Moreover, DIY undertakings like this one place you at risk of having your home insurance policy and home warranty agreement voided, as well as any manufacturer warranties for fixtures or appliances impacted by this work.
Although dividing major plumbing projects into smaller and more manageable increments is a reasonable enough solution to significant funding woes, it isn’t guaranteed to provide the best results. Patching new plumbing in with pipes and other fixtures that have failed or are failing will still leave you with a low-performing plumbing system overall, and frequent leaks, clogs, and other problems to fix. Financing these projects allows homeowners to get everything done at once. It also makes it easier to budget for the total costs of this work and to choose materials and products that are perfectly in line with your spending abilities.
We’re committed to helping residents of Fox Valley, WI make informed decisions about their homes. We’re also proud to help our clients get the funding they need for major plumbing replacements and repairs through our partnership with Greensky. We offer top-notch heating, cooling, plumbing, and electrical services. We also provide heat pumps, ductless mini-splits, and indoor air quality solutions. To find out more about our options in financing or to schedule an appointment, get in touch with Black-Haak today!