Custom Inground Pools & Spas: Swimming Pool Financing

Friday, April 18, 2008

Swimming Pool Financing

Swimming Pool Financing is more difficult these days due to the ongoing real estate troubles. If you're wanting to have a new custom pool this year, you could face obstacles in getting financing for the project.

The basics:

Financing for home improvements is still readily available IF you are a good credit risk.
A good credit risk entails the following:
* Mortgage payments have been made on time over the last 12 months
* Debt is not excessive as compared to income
* Income is verifiable
* Credit cards, auto loans, other creditors have been pretty much paid on time.
You could have a blemish or two on your credit and still get financing for your home improvement, especially for an inground pool project. So long as you are stable with income and credit, no equity is required to get the home improvement loan for a new pool.

With the mortgage meltdown, lenders are cautious and the best way to get pool financing if you don't have equity is through a pool builder that has dealer financing for their swimming pool projects. When you work with a pool contractor that is a dealer, they will have special arrangements made that can help to get you the best interest rates and terms for your pool project.

If you have equity in your home and good payment history, good credit, etc. you probably won't find any trouble in securing funds for your swimming pool project. If you have only a first mortgage (no second), even if there's no equity in the house, either because you financed 100% of the home amount or because the value has dropped, it shouldn't be a problem to get a swimming pool loan.

In fact, even if you have an existing first and second mortgage on the house you can usually still get a pool loan. In this case, it would be made as a 3rd mortgage on the house. Interest rates for a 3rd mortgage loan are usually a point or so higher that that of a 2nd mortgage loan but again, the rate you get will be determined upon your overall credit standing and fico credit score.

Usually you will need a fico score of at least 640 to qualify for a swimming pool mortgage loan. As with everything else in life, higher credit scores receive the best loan rates.

The trouble these days is with declining home values, especially in certain areas. Southern California, Nevada, Arizona are states which are having bigger problems with declining values than in other areas of the country.
If you live in one of these states, some cities have experienced such a decline in housing values that homeowners now owe more on the home than it is worth. This can be a problem in securing financing for any kind of home improvement.

If you don't know the current value of your home, you can do a quick value check online. A couple of good places to check home values online are and

Even if you're a little "upside down" with your mortgage, a good pool builder finance program might be tha answer to securing funds for your project. In Southern California, www.PoolsByWaterworld offers dealer financing for swimming pools as 2nd or 3rd place mortgage loans without equity required. Their website has information on pool financing with little or no equity required. Mortgage loan interest is usually deductible and their programs are simple interest, no pre payment penalty. This means that you can refinance later down the road and not have a penalty for early loan payoff. They also have deferred payment programs so you can build a new pool and the payments don't start for 3 to 6 months. That's nice!

Summer will be here soon, swimming pool financing can take a couple of weeks from the time you submit your application until the loan has funded. Swimming pool permits in certain area also take time so if you're thinking of enjoying a new pool this year, it's time to get going so you'll be ready to swim when the heat is on!
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