Swimming Pool Financing

How Do You Finance
Your Swimming Pool????

I'm not particularly an expert on swimming pool financing, but if you are interested in having an inground pool installed, and you can't pay cash for it, you will have to finance it. (If you are interested in knowing the true and actual costs of installing and maintaining a new swimming pool, click on over to this series of articles and be informed of the actual costs. Click True Pool Costs to read these articles)

While there may be other types of loans that you can take out, a home equity loan has definite advantages (and a few disadvantages). To learn about swimming pool financing, you should do two things: 1.) look around online for information on loans and then 2.) pay a visit to your local bank, or get a recommendation of a local mortgage broker.

To begin with, we'll have to assume you're a homeowner (otherwise you might want to rethink the idea of having a swimming pool, eh?) and that you have a mortgage on your home. To finance your swimming pool, you will probably be looking at either refinancing your existing mortgage (and hopefully getting a lower interest rate), or taking out a second mortgage or home equity loan.

Your options are going to vary slightly in cost from lender to lender. Now-a-days it is pretty hard to compare your total costs between banks and/or brokers because there are so many fees and things that can be charged during your pool financing or home re-financing (and they can also be referred to as slightly different things.)

With a home equity loan (or second mortgage) the total amount that you can borrow will be the difference between the appraisal of your home and the principle that you currently owe. In other words, if your house appraises for $150,000 and you have $125,000 principle left on your mortgage yet, you can borrow up to $25,000. Please remember that, unless you want to pay for your closing "costs out of pocket", your closing fees will be taken out of your loan amount. In other words, if you can borrow $25,000 and your closing costs are $3000, you will only be able to apply $22,000 toward the financing of your pool

It has been my parents limited experience with home re-financing (and swimming pool financing) that they prefer the local mortgage broker. They believe that while it may be possible to compare actual closing costs between two sources, it is extremely difficult. They also believe, generally speaking, most of the fees should be about the same between lenders, i.e., most appraiser's fees will be about the same, most lawyer fees will be about the same, most title searches will be the same, and so on.

Based on this, one of the biggest factors affecting your costs will be your mortgage rate and length of loan. If you use a mortgage broker, they have a long list of sources to which they can turn and get the best deal for you. It all depends upon your circumstances. They may look in one place for some people's circumstances and look in other places for another person's needs. If you go to a bank, I believe they are more locked into fewer choices to select from and may not necessarily get you the best deal.

The other reason my parents like to work with a local broker is that the local broker service is much more personable. The local broker will often go that extra mile to help you and take good care of you. My parents' dealings with the local broker have always been better than the service they received when working with the local banks.

In summary, I would suggest that you look at some of the more reputable places online and learn as much as you can. You may find that their costs are a little lower than your local sources, but I think the overriding factoring of who you chose - is that the one-on-one, face-to-face dealings can't be beat.

You are dealing with thousands and thousands of dollars in your swimming pool financing and you want the peace of mind that when you have a problem or question, that there is someone, only a phone call away, who can help you.

Bottom line, while I don't know this for sure, I believe that if you could compare costs between different lenders, you would probably find that the differences are relatively small. This means who you are most comfortable dealing with will be the factor in deciding who to go with in your swimming pool financing.

Remember .... to get actual prices of installing and maintaining a new in-ground swimming pools click True Pool Costs to read.