How to Pay for Foundation Repair

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Your family has saved for years for that three-week Caribbean cruise, and then you’re hit with the bad news that your home’s foundation is structurally unsound and will need costly repairs that you simply can’t afford without turning your vacation savings into an emergency repair fund.

The cost of foundation repair is often large and unexpected, but you don’t have to deplete your savings or go into debt in order to afford it. Fortunately, you have a number of financing options to help you pay for foundation repair, making it possible to get the problem fixed before it leads to other costly structural problems throughout your home.

Payment Plans

One of the most common ways to finance a foundation repair project is through a payment plan offered by the foundation repair contractor. If you can’t pay the full amount upfront, ask your contractor if it’s possible for you to make segmented payments over a period of time. This will allow you to spread out the cost of the repairs and give you more time between payments to save up the needed funds.

Before considering this option, do your research and compare the financing terms of several reputable foundation repair companies. It’s important to read all the fine print so you fully understand how much you’ll need to pay and when.

Third-Party Home Repair Financing

To help homeowners get the financing they need to pay for expensive foundation repairs, many foundation repair companies work in partnership with third-party institutions specializing in home repair financing. Some third-party lenders offer “same as cash” loans that allow you to pay off the loan in monthly installments with no interest. Another option commonly offered is a reduced interest loan that has flexible repayment terms and low interest rates.

If your foundation repair contractor has established such a partnership, you would apply for the loan through the third-party financial institution and then pay it back under their terms, independently from your contractor. The lending terms of these loans can vary greatly among financial institutions, depending on factors such as the borrower’s credit score and financial situation. Again, do your research and read all the fine print.

See these foundation repair financing options offered by RamJack.

Home Equity Loan or Line of Credit

Home equity loans and home equity lines of credit (HELOCs) are two popular ways to finance major home improvements, such as foundation repairs. But in order to be eligible for these financing options, you need to have enough equity in your home to serve as collateral for the loan.

A home equity loan provides a single lump sum of money that you’ll need to repay in equal monthly payments over a fixed term. A HELOC, on the other hand, provides a revolving line of credit that you can tap into as needed up to a specific limit, much like a credit card. Unlike home equity loans, which usually have a fixed rate that doesn’t change during the life of the loan, HELOCs have variable interest rates that can adjust up or down, depending on market conditions.

Generally, if you are using the loan to fund a single project for which you know the cost, such as repairing a foundation, a home equity loan is the best choice because it gives you the predictability of a fixed interest rate and knowing exactly what your monthly payments will be. If you aren’t sure how much funding you’ll need, a HELOC will give you more flexibility in terms of loan disbursement and repayment.

Personal Loan

Taking out a personal loan is a great financing option if you don’t have enough equity in your home to qualify for a home equity loan or HELOC. What’s more, personal loans are a fast way to get funding for a foundation repair project. Generally, you’ll be able to apply for and receive the loan within a week, although the time frame can vary from lender to lender, according to Bankrate.com.

Personal loans are widely available from traditional banks, credit unions, and online lenders. If you have an established relationship with a local bank, that’s a good place to start. But you should still shop around because you may be able to find better interest rates and terms elsewhere.

When applying for a personal loan, you’ll have a better chance for approval if you have an excellent credit score and a steady source of income. Also, be sure to borrow an amount that’s large enough to cover the entire cost of the foundation repair and any associated costs, such as a structural engineer’s report and landscaping services to restore the area after repairs are made. Once the loan is approved, make sure you understand the terms and what the fees and penalties are for late payment.

Homeowner’s Insurance

This option is last on the list because it is rarely one you can count on. Most homeowner’s insurance policies won’t cover the cost of a foundation repair unless the problem was caused by a natural disaster for which your home is specifically covered. The most likely causes of foundation damage, such as soil expansion and contraction or poor construction, are typically excluded. Still, it’s always wise to check with your insurance provider to make sure.

Learn more: Will Your Homeowner’s Insurance Cover Foundation Repair?

Can You Fix Foundation Problems Yourself?

When your home has foundation problems, you might be tempted to tackle the repairs yourself to save money. But when it comes to foundation repair, DIY fixes should be limited to filling minor cracks. And even then, those cracks could be a sign of a more serious structural issue that only a knowledgeable foundation repair contractor can identify and correct.

If it turns out that your foundation is settling and will require piering to lift, level, and stabilize it, that is a repair that should only be performed by a professional who has extensive experience in the safe and proper installation of these systems. In addition, a reputable foundation repair contractor will often back their work with a transferable warranty, giving you or a potential buyer of your home the peace of mind that the problem won’t return.

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