A backyard pool can provide endless enjoyment and family memories, but there is no denying that it can be a costly undertaking. Due to the investment required, people often assume that they can’t afford a pool.
But what they don’t realize is that, with the wide variety of pool financing options available, the dream of owning a pool is likely within reach for many homeowners.
What is Pool Financing?
Pool financing is a type of loan or credit line that can be used to pay for a new pool over time. Common pool financing options include home equity loans, secured or unsecured personal loans, home equity lines of credit (HELOCs), or direct financing from a pool dealer, all of which can make owning a pool more obtainable for many homeowners.
Pool Financing Options
When researching the best way to finance a pool, the wide range of options available can seem overwhelming at first. But typically, there are three main categories of pool financing to be aware of: in-house pool loans, financing that leverages the equity in your home (like home equity loans or HELOCs), and personal loans.
Pool financing is not one-size-fits-all, which is why it is important to carefully consider the pros and cons of each to ultimately decide which type of financing best fits your needs.
In-House Pool Loans
One of the most common ways to finance a pool is to work with your pool dealer to secure a pool loan through one of their preferred lenders. This is a popular option for homeowners because it is convenient and helps streamline the process, as your pool dealer will be able to speak to what information is required, help with paperwork and answer any questions you might have. This ultimately helps speed up the process and can help increase your chances of getting approved for the loan, which is win/win for everyone.
Home Pro has partnered with two trusted industry leaders in Lyon Financial and LightStream to provide pool loans to customers directly.
Home Equity Loans & HELOCs
Home equity loans and home equity lines of credit (HELOCs) are a common way of financing a new pool. With both, you’re able to draw upon the equity of your house. However, there are some key distinctions between these two types of financing options.
A home equity loan, or “second mortgage” offers fixed interest rates over a fixed loan term. A HELOC works similar to a credit card, where you’re offered a line of credit based on the value of your home and are able to draw upon it as needed, for the length of the loan term. HELOC interest rates are typically variable rather than fixed, making it more difficult to predict what exactly you’ll owe.
Because you’re using your home as collateral, you typically are able to get a lower interest rate. However, if you default or fall behind on payments, you can potentially lose your home, so it is important to stay current.
Leveraging the existing equity in your home can be a great way to finance your pool. It’s a natural fit, as by adding a pool you’re making an investment in your home and intend to stay for a while!
Personal Loans
Personal loans are typically unsecured loans that you get from a financial institution or online lender that can be used for a wide-range of purposes, including a new pool. Unsecured loans are based on a person’s credit history and don’t require property to be used as collateral in order to secure the loan. Because these loans are for personal use, they are typically more flexible, have less stringent requirements and can be acquired fairly quickly, making them a good option for those looking to finance a pool, but do not want to use their house as collateral or do not have significant equity.
While unsecured personal loans do not require collateral, they typically have higher interest rates. These types of loans also usually have fixed terms ranging from 12-84 months.
