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The Top Roof Financing Options for Homeowners


Apr 9, 2023



Table of Contents

Your Protective Roof

Did you know that water causes the most financial damage to homes across the nation? If you don’t have a solid roof over your head to protect you and your property, your property value can rapidly fall. Your roof is usually your first layer of defense or protection against extreme weather patterns related to rain, snow, hail, wind, or lightning storms. The maintenance or upgrading of your roof should be considered one of the best investments that you’ll ever make for your home and for you and your overall good health.

How many of us have sat in our homes waiting for the latest weather storm to pass? During many of these more extreme weather events, it may be difficult or almost impossible to leave our home and drive anywhere. While it can be incredibly frustrating to feel trapped in our home, it’s usually wise and safe to not leave our home and travel anywhere partly since the roads may be flooded too.

After the storms pass and the sun shines brightly in the sky, some homeowners may ignore the damage caused to their house, condominium, or townhome from excessive rainfall, wind, hail, snow, or lightning. Yet, these same homeowners should pay close attention to the damage caused by these storms or their repair costs could rise dramatically as the property damage increases over time.

The national average cost to replace a damaged roof is about $8,000. The repair costs can vary between $5,500 to $11,000 or more, as per a recent analysis completed by Forbes.

Upwards of 60% of a roof repair bid from a contractor is for labor costs and 40% is for the actual material supplies. The labor cost for the workers can average between $1.50 and $3.00 per square foot. On your bill, it may appear as a cost between $150 and $300 per square which is equivalent to 100 square feet.

Your roofing repair team will have to first review or survey the damage on the roof. Many homeowners never or rarely go up on the roof, so they are likely to be shocked to learn about how badly damaged the roof is after a strong storm event. The roofers will then clear any debris on the roof before adding new tiles made up of clay tiles, rolled roofing, concrete, wood shingles or shakes, aluminum or steel, synthetic rubber, or some other composite.

If you need your roof fixed during the midst of a rather chilly winter day or an incredibly hot summer day, the roofers will probably charge you higher fees to repair the roof. This is partly why it’s wise to not put off any known roof repairs until well after an extreme weather event.

If you protect your roof, your roof will protect you and your family!

Extreme Weather Trends

Floods from horrific rain storms or hurricanes especially are generally the most common and costly natural disasters each year. Within the past 20 years, the 10 most financially damaging floods in the history of the National Flood Insurance Program (NFIP) occurred while costing more than $50 billion dollars. A staggering 75% of national flood insurance payouts took place since 2002.

FEMA (Federal Emergency Management Agency) defines flood as follows:

A general and temporary condition of partial or complete inundation of 2 or more acres of normally dry land area or of 2 or more properties (at least 1 of which is the policyholder's property) from:

  1. Overflow of inland or tidal waters; or
  2. Unusual and rapid accumulation or runoff of surface waters from any source; or
  3. Mudslides (i.e., mudflows) which are proximately caused by flooding and are akin to a river of liquid and flowing mud on the surfaces of normally dry land areas, as when earth is carried by a current of water and deposited along the path of the current.; or
  4. Collapse or subsidence of land along the shore of a lake or similar body of water as a result of erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels that result in a flood as defined above.

Let’s take a look next at the 10 largest payouts in the history of the National Flood Insurance Program on an adjusted inflation basis:

  1. Hurricane Katrina - $22.17 billion
  2. Superstorm Sandy - $10.05 billion
  3. Hurricane Harvey - $$10.03 billion
  4. Hurricane Ike - $3.32 billion
  5. Louisiana severe storms and flooding (2016) - $2.83 billion
  6. Hurricane Ivan - $2.40 billion
  7. Hurricane Jeanne - $2.15 billion
  8. Hurricane Ida - $1.64 billion
  9. Hurricane Irene - $1.58 billion
  10. Hurricane Irma - $1.26 billion

Source: FEMA

Surprisingly, an estimated 75% of flood insurance funds that were paid by the National Flood Insurance Program (NFIP) to property residents were located in just five states: Louisiana, Texas, Florida, New York, and New Jersey. After being adjusted for inflation, Louisiana was the highest-ranked state with NFIP payouts at $28.9 billion dating back to 1978. The highest percentage of NFIP payouts to Louisiana residents were as a result of Hurricane Katrina which totaled $22.1 billion dollars.

Home Financing Options

Most Americans set aside very little cash savings whether they’re fortunate to own a home or not. The average American individual or family household creates the bulk of their overall net worth from the equity in their primary owner-occupied residence. Yet, a significant number of homeowners cannot quickly obtain cash from the equity in their residence like they can from writing a check or electronically transferring money from their bank account.

Many times, damage to a roof, an exterior wall, flooring, or to the foundation comes suddenly and unexpectedly when the homeowner can least afford to repair it. Few people enjoy writing checks for home or car repairs. However, most people need a place to live and access to transportation, so they will figure out hopefully an affordable way to cover the expenses.

Let’s take a look next at some of the cash out options that homeowners can select specifically for roof repair:

  • Home Equity Loan as a 2nd mortgage: The home equity loan is usually a fixed dollar amount loan that is recorded in 2nd position behind the owner’s existing 1st mortgage loan. The loan term may vary between 3 and 30 years at a fixed rate in most cases. The borrower is likely to pay the same fixed monthly payment on the entire amount of the loan funded whether it be $50,000, $100,000, or $200,000+ even if the borrower doesn’t need all of the funds at once.

  • HELOC (Home Equity Line of Credit): A revolving line of credit that’s based upon the homeowner’s equity in their property. These loans may be in 1st or 2nd position, depending upon whether or not the property is currently leveraged with an existing mortgage or is free-and-clear with no mortgage debt.

Some HELOCs may allow borrowers to access up to 85% loan-to-value (LTV) or combined loan-to-value (CLTV) minus any existing 1st mortgage debt. The borrower only draws or borrows the funds as needed and may quickly pay them back during the initial draw period which may last for 10 years. Then, the borrower may have up to 30 years to pay back the loan balance.

A borrower can close an initial HELOC loan with a zero balance and pay nothing each month as a payment. Or, a borrower may pull out some or all of the HELOC balance amount as needed to cover their expenses or for other new investment opportunities. Some flexible HELOC options like offered by Hitch may allow lower FICO credit scores and more flexible mortgage underwriting allowances because the home collateral for the loan is so solid and the risk is perceived as lower than unsecured loans.

  • Cash-Out Refinance: The home borrower refinances their existing mortgage balance to create a much larger new mortgage balance for cash-out purposes. The main problem here in 2023 is that today’s first mortgage rates are so much higher than in previous years. For example, an estimated 80% of all open first mortgage loans nationwide were reported by CoreLogic as being at or below 4% as of July 2022. Today’s cash-out first mortgage rates may be 2%, 3%, or 4% higher, depending upon the borrower’s creditworthiness. These loan types may be considered as conforming, conventional, or backed or insured by VA or FHA.

  • Credit Cards: The rates and fees for credit cards have reached almost all-time peak highs in recent months while overall credit card balances nationwide are very close to a record high of almost $1 trillion dollars. As a result, credit card companies may soon start cutting back on their allowable debt ceiling limits and these annual rates that exceed 20% for many borrowers make the borrowing costs quite expensive. Other types of unsecured personal loans that aren’t secured by a home will likely be incredibly costly as well due to lack of sufficient collateral.

  • Contractor Financing: Many different types of roofing, pool, or general contractors do offer their clients types of financing to complete these job assignments. However, a high number of these types of contractor financing options are akin to unsecured personal loans that can be completed quickly online or over the phone. Yet, you’ll end up paying as much as 20% to 36%+ for easier contractor loans that seemed very attractive at the start of the application process until the borrower later realizes the true overall expense.

We here at Hitch offer both ease of application with our digital HELOCs and much more affordable and flexible lending solutions for our borrowers than our competitors.

Health Risks from Roof Leaks

There have been 341 reported weather and climate disasters where the overall damage costs exceeded $1 billion dollars for each storm event since 1980, as described by the National Oceanic and Atmospheric Administration (NOAA). Between 1980 and 2022, the total cost of these extreme 341 weather events surpassed $2.480 trillion dollars. Let’s take a closer look at the 2022 year to better understand how the extreme weather storms are punishing properties and homeowners with rising repair costs and insurance bills as compared with previous years. There were 18 weather/climate disaster events as defined by NOAA in 2022 with financial losses exceeding $1 billion each. These weather events included one drought, one flood, 11 severe storms, three tropical cyclones, one wildfire, and one winter storm.

Between 1980 and 2022, the annual average for a weather/climate disaster event was listed at 7.9 events. Yet, the annual average for the most recent five full years completed (2018 - 2022) was 17.8 weather/climate events. As you can see, the number of extreme weather events nationwide has more than doubled in recent years. Are you noticing more damage to your roof, fences, yards, exterior walls, patio covers, or to your car? If so, you’re not alone and are not imagining it.

Property loss can be financially devastating and quite painful. However, the loss of human life or the onset of worsening health conditions related to extreme weather damage to your property is more tragic. In 2022, upwards of 474 people lost their lives as a result of these 18 weather/climate disaster events, as per NOAA.

Mold or Fungi Risks

Mold or fungi need water to thrive and flourish. Mold is a simple, microscopic living organism that often cannot be clearly seen by the human eye. Molds and yeasts are both fungi. Fungi is the primary decomposer in ecological systems that usually break down fallen leaves, dead trees, and once living beings that have since died.

Fungi is most likely to be found in dirt, plants, and in dark and humid attics under a damaged roof or in ceilings, walls, and basements. A leaky roof, a cracked foundation, or walls with holes in them are some of the more typical reasons why so many homes across the nation have such mold or fungi damage.

Mycotoxins (or “mold poison”) are harmful toxins or poisons which are produced by molds or fungi. You’re more likely to get sick from indoor pollution rather than from outdoor environmental pollution.

There are somewhere between 100,000 and 400,000 types of fungi across the world. An estimated 1,000 mold types have been discovered and identified in U.S. homes by scientists. Molds are classified within three major group types as it pertains to adverse human health reactions:

● Allergenic molds: While these may not be potentially life-threatening to human or pet occupants, they can still cause mild to serious allergic or asthmatic reactions that’s especially true for younger babies, toddlers, or children.

● Pathogenic molds: These types of harmful molds can create more severe pneumonia-like lung infections for home occupants who may struggle to clearly breathe.

● Toxigenic molds: The most dangerous and deadly types of mold that can be labeled as “black mold” or by other names. Some of the negative health challenges can include autoimmune disease-like reactions, bleeding lungs, cancer, and neurological or brain damage.

Next, please review the information about the HELOC funding solution that can help you pay off your debts sooner rather than later. Hitch has leveraged and combined advanced technology, the online loan application process, and access to capital for our clients so that it’s more simple and at a faster application and approval pace. To learn more details about the Hitch digital HELOC, please see what your offer could be here.

Hail Damage & Roof Investments

Hail the size of a small rock, golf ball, or grapefruit can damage a roof more quickly than almost any other weather event. Hail can easily shatter tiles on a roof and even puncture holes in the roof. These holes in a roof need to be quickly repaired by you or other homeowners before it starts raining or snowing again.

Your repair bills can skyrocket if water or melted snow starts to flood your interior walls, floors, or basements. If so, the roof repair bill estimate of $1,000 or $2,000 can turn into a new contractor repair bill of $10,000, $20,000, or $30,000+ for new carpet, wood floors, electrical repairs, and toxic mold cleanup work.

There have been between 3,700 to more than 4,400 major hail events across the nation in recent years, according to the NOAA’s Severe Storms database. Hail can be especially consistent and destructive in certain states like Texas and elsewhere. The Top 5 states in 2022 by the number of major hail events were as follows:

    1. Texas - 458
    1. Nebraska - 399
    1. Minnesota - 387
    1. Kansas - 289
    1. South Dakota - 275

United States - 4,436 (2022)

Sources: U.S. Department of Commerce, Storm Prediction Center, and National Weather Service

An estimated 90% of asphalt roofs sold nationwide are fiberglass shingles. The average residential roof size is 1,600 square feet, as per RoofCalc. Hail, rain, snow, lightning, and strong winds can easily break or shatter roof shingles or fragile clay tiles and create destructive holes in your roof.

An investment in a new roof can be one of the most effective and longest lasting upgrades to your home that you can choose to make. For example, a typical new roof can last between 25 and 50 years. A metal roof, however, can last upwards of 75 years through the various types of mild to extreme weather pattern cycles.

Your home and the overall health and well-being of you, your family, or any other occupants are much more valuable than a roof repair cost. Your investment in a new roof and other property upgrades might turn out to be one of the wisest financial and health decisions that you will ever make.

You need to remain in control of your finances. You’re the person who can best protect you and your household more than anyone else. To get started on unlocking the value of your home please click on our loan application link: Digital Hitch HELOC Loan Application

Borrow from yourself, not the bank!

See your equity and HELOC rate in seconds

Equal Housing Lender

Hitch, Inc. NMLS #2383367 #2383367

2158 NW Toussaint Drive. Bend, Oregon 97703

1. Qualified applicants may borrow up to 95% of their home’s value. This does not apply to investment properties.

2. HELOCs have a 10-year draw period. During the draw period, the borrower is required to make monthly minimum payments, which will equal the greater of (a) $100; or (b) the total of all accrued finance charges and other charges for the monthly billing cycle. During the draw period, the monthly minimum payments may not reduce the outstanding principal balance. During the repayment period, the borrower is required to make monthly minimum payments, which will equal the greater of (a) $100; or (b) 1/240th of the outstanding balance at the end of the draw period, plus all accrued finance charges and other fees, charges, and costs.The lender will calculate this amount by taking the outstanding Account Balance on the last day of the draw period and dividing it by 240 months and then adding any finance charge that accrues but remains unpaid during the monthly billing cycle plus any other fees, charges and costs to the fixed principal payment that is due. During the repayment period, the monthly minimum payments may not, to the extent permitted by law, fully repay the principal balance outstanding on the HELOC. At the end of the repayment period, the borrower must pay any remaining outstanding balance in one full payment.

3. The time it takes to get cash is measured from the time the Lending Partner receives all documents requested from the applicant and assumes the applicant’s stated income, property and title information provided in the loan application matches the requested documents and any supporting information. Most borrowers get their cash on average in 21 days. The time period calculation to get cash is based on the first 4 months of 2024 loan funding's, assumes the funds are wired, excludes weekends, and excludes the government-mandated disclosure waiting period. The amount of time it takes to get cash will vary depending on the applicant’s respective financial circumstances and the Lending Partner’s current volume of applications. Closing costs can vary from 3.0 - 5.0%. An appraisal may be required to be completed on the property in some instances.

4. Not all borrowers will meet the requirements necessary to qualify. Rates and terms are subject to change based on market conditions and borrower eligibility. This offer is subject to verification of borrower qualifications, property evaluations, income verification and credit approval. This is not a commitment to lend.

5. The content provided is presented for information purposes only. This is not a commitment to lend or extend credit. Information and/or dates are subject to change without notice. All loans are subject to credit approval. Other restrictions may apply.