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Financing a Challenge for Pool Shoppers
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Pool buyers who need financing assistance are having a difficult time; due to the decline in home values. Shrinking home equity and disappearing credit lines have frustrated many homeowners in the quest to build their backyard getaway. Banks are also tightening the "Loan to Value" percentages required to secure financing.
The collapse of the housing market has eliminated the most common means of financing a pool. A Second Mortgage was the usual avenue for making a purchase as large as a swimming pool. The Second Mortgage allowed the lender to offer a "secured" loan and lower their exposure.
During the housing boom many lenders were willing to finance up to 125% of the home value; making it possible for homeowners with limited equity to purchase a pool. This practice came to a halt once the housing crisis became apparent.
There are few options available; but most involve a total refinance of the home using the added value of the pool. The percentage of the combined value of the home and pool varies by lender and is also dependent on the homeowner's credit rating.
Homeowners who are unable to pay cash for the pool; would be wise to make sure financing is available BEFORE getting pool quotes. Determining how much they can borrow will allow them to customize their purchase to fit the funds available.
There are pool companies advertising financing; but in most cases; they are working with a bank or broker with limited flexibility. Homeowners would be wise to talk with the specific lender to find out the details. Doing a total "refi" may not be in their best interest if it involves huge closing costs or an interest rate higher than their current mortgage.
Pool pricing is time sensitive; getting quotes with no financing available is a waste of time. It would be better to wait until lenders relax their requirements; or housing values start to rise; before collecting bids.
Pool builders ARE offering substantial savings for those buyers with cash. Many "Bells and Whistles" can be added after the pool is built and homeowners would be wise to get the basic pool to take advantage of the depressed market.
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