Ranking the Financing Options for Window Replacement

window replacement

You do not need to be in the top 1% of America to fund your custom window installation in San Diego, New York City, Chicago, Miami, or Houston with your savings. However, there is a good chance that you do not have $10,000 lying around your house for such a project.

To buy high-quality replacement windows without draining your cash reserve, here are the most viable financing options you should consider:

Credit Card

According to Experian, the average credit card limit of an American in 2016 was a little over $8,000. If you belong to the Silent Generation or are a Baby Boomer, your plastic might be more powerful since with age can come more access to credit.

If you have the purchasing power of two credit cards, then you might be able to replace all of your old windows even if you live in a standard three-bedroom single-family detached house.

Thanks to payment processing platforms and tech-driven contractors, paying your home improvement bills with plastic is easier than ever.

Personal Loan

If you do not want to see your FICO scores drop by maxing out your credit cards, apply for a personal loan instead. It is unsecured, so it does not require any collateral at all in exchange for an interest rate slightly greater than that of a mortgage. It is payable for several years; this means you can manage the overall cost of your window replacement.

Home Equity Loan

The funds you can tap via a personal loan might be limited, so a home equity loan makes a good alternative if you need more money. Taking it out is feasible if you have been paying for your mortgage for a couple of years, for the amount you can borrow depends on the home equity have built.

Since you have to borrow against your property when you get a home equity loan, realize that your mortgage might end up underwater. This situation makes it harder for you to sell your house without absorbing any loss. Think long and hard before turning most of your home equity in one fell swoop.

Home Equity Line of Credit (HELOC)


Compared to a home equity loan, a HELOC can offer more flexible payment options. You might be allowed to pay only the interest initially, so you will have more time to save up for more significant payments later on.

Cash-Out Mortgage Refinance

A mortgage refinance happens when you take out a new home loan to pay off your existing one. If you execute the cash-out kind, you can receive a ton of money since it converts your home equity into dollars. You can use the proceeds of the refinance for whatever purpose you want, making it a viable option for funding home improvements.

One of the caveats of a refi is it resets the clock of your loan. You can save on interest if you manage to snag a lower mortgage rate or shorten your term, but you need to hold on to your home loan long enough to truly save money.

All financing options have their pros and cons, so understand each of them to choose wisely. If you think about the contingencies when planning your project’s budget, you can rest assured that the process will go smooth sailing with the right source of funds.

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