Many homeowners need crawl space encapsulation or basement waterproofing but struggle with the best way to pay for the project. According to market research, 75% of all home remodeling projects priced over $2,500 are financed in some way. Many homeowners have less than $4,000 in savings. No one wants to use their emergency fund to waterproof their crawl space or basement, so why are homeowners reluctant to finance the crawl space encapsulation or basement waterproofing?
Home Improvement Financing Objection #1
“A loan will bring my credit score down because the bank will pull my credit report.”
It is true that multiple inquiries or shopping for loans can affect your credit score. But this varies from person to person. Typically, an inquiry will have very little impact on your credit score. Again, this can vary if you have tried to buy a motorcycle, beach property, and applied for the local retail credit card in the past 30 to 90 days. In the end, credit scores are more affected by high card balances, late payments, charge-offs, unpaid student or medical debt, and bankruptcy.
Financing Objection #2
“I don’t want another account on my credit report because it will hurt my credit score.”
How much an additional account affects your credit score depends on how many accounts you have and the balance of each. Having 5 credit cards maxed out or high debt to income ratio and adding another account can affect your credit rating. Credit report agencies see more risk if you are maxing out credit cards versus occasionally taking out a new loan.
Home Remodeling Financing Objection #3
“I can get a better interest rate on my credit card than I can on any other loan.”
Credit card companies love to hear you say this. This may be true if you have great credit and can get a 0% card for six months. Some get sky miles or cashback options from 1% to 5%. All of those promotions are wonderful. Typically, only those with excellent credit qualify for those deals.
Many of our customers discover crawl space and basement problems suddenly. It is an unexpected, no-way-of-planning-for-it situation. As mentioned before, the $4,000 rainy day fund may not be enough. If you have great credit and your credit card company gives you a great incentive then take it. Most of us, however, need a non-secure home improvement loan option.
Crawl Space Ninja has partnered with several lenders that offer loans to ok to great credit score homeowners. These loans require no collateral and can be paid off early with no penalty. I even did a video that I will put below about financing home improvement versus paying cash that I hope you will watch.
Do you need help fixing your crawl space or basement and are unsure of how to pay for it? If so, we can help. Please contact us to schedule your assessment. Also, let us know in the comments below if you’d like to suggest a future blog post.
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