Financing a swimming pool purchase or a lap pool's purchase is one form of financing that many people do not even think about, but really should be considered over using a traditional home-equity line of credit or other form of loan first for several reasons. In fact, there are several inground swimming pool financing companies that exist solely to provide regular pool, gunite pool, or above ground pool financing, and will be able to help you much better than a traditional banker who does not specialize in pool financing and who may not understand all the intricacies and benefits associated with adding a pool to your home.
One of the reasons why pools financing might be a good idea is that adding a pool can be an investment that adds value to your home. Yes, a pool is an expense (maintenance costs, pool service, adding pool accessories like a swimming pool slides, etc.), but it is not a depreciating asset like a vehicle is. In fact, a vehicle is not best treated as an asset since it depreciates overtime (rather quickly as well) and costs money to maintain (tires, breaks, oil change, problems, etc.). However, a pool really can add value to your home and make it easier to sell and make it so you can sell your home for more money if that time comes. So if bankers are willing to lend you money for your car, they should also be willing to lend money for your pool. Unfortunately, pool financing is not as common, which is why I suggest speaking with someone who specializes in pool financing.
What this means for you is that you need to do your homework and find the right swimming pools financing specialist. Such a specialist should offer the following benefits for you:
- They will consider using a long-term mortgage as a lending option and will possibly base the value on the value of the property after the pool is installed. Since the pool is adding value to your home, then it should be included.
- Find a lender who can possibly operate off of a past assessment of your home’s value. And new, full appraisal of your home will take time and cost several hundred dollars, so if you can avoid this you should. However, given the current market situation, this may not be an option so don’t let this deter you from trying to get a swimming pool financing loan.
- Find a pool lender who will consider your unique situation and tailor a loan that fits your needs. Many pool loans can be structured to be either short-term or long-term loans with either fixed-rate or variable-rate loans. Also, remember that swimming pool loans can be designated as improvements to your home, and as such can carry much lower interest rates than a home line of credit or other type of financing.
- Finally, find a pool lender who can also advise you on the tax ramifications of your swimming pool loan, as such a loan may be tax deductible.
One other option to consider given the current market is to use this as an opportunity to refinance your home and include your pool in the refinancing. Interest rates are still at historically low levels and depending on your situation you may be able to add the pool, refinance at a lower long-term rate, and still keep your mortgage payment either the same or possibly even lower your payment. This will obviously be an option if you have significant equity in your home. However, don’t make the same mistake millions made in the housing bubble of taking all their equity out of their homes in a refinancing, only to find themselves upside-down a year later. As always, be prudent when considering financing and make sure you understand all the risks associated with your loan, especially your pool financing loan. However, once you understand all the intricacies associated, you will still likely find that financing a swimming pool could possibly be a great option for you.
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