This blog is for educational purposes only, not an offer of credit or advertisement for current loan terms. It does not provide legal advice. Refer to our loan web pages or consult professional advisors for specific information.
Every year, thousands of American homeowners seek home siding financing solutions to update their home value or curb appeal. But is it worth the time and money?
Upgrading your home siding can recoup an average of 82% of your cost. That means it’s one of the top exterior upgrades you can do for your home.
However, financing this project can be challenging. There are different ways to achieve siding financing, but a home equity loan is one highly effective way to fund your siding replacement.
This article will help you understand when you need new siding, the basics of a home equity loan, and how it can be an excellent option for financing your siding project.
Start your application with MIDFLORIDA Credit Union.
When do you know you need new siding
Recognizing the telltale signs that your home needs new siding is important for maintaining its structural integrity and aesthetic appeal.
Here are some key indicators that it’s time to consider new siding.
Visible damage
Cracks, warping, rotting, or significant fading are signs that your home's siding needs replacing.
These issues can compromise your home's protective barrier, leading to further damage and increased energy costs.
High energy bills
Have your energy bills been steadily increasing? It could be due to your siding losing its insulating properties.
Replacing old siding with new, energy-efficient materials can help reduce your heating and cooling costs.
Mold and mildew growth
The presence of mold, mildew, or fungus on your siding suggests moisture infiltration, which can damage your home's structure.
New siding can provide greater protection against moisture and prevent such issues.
Peeling paint or wallpaper indoors
If you notice paint or wallpaper peeling inside your home, it could be a sign that your siding is allowing moisture to penetrate the walls.
Replacing your siding can resolve this issue and protect your home’s interior.
Frequent maintenance
If your siding requires constant maintenance and repairs, it might be more cost-effective to replace it entirely.
New siding materials are designed to be more durable and low-maintenance, saving you time and money in the long run.
Can I use a home equity loan for new siding?
Yes, home equity loans are viable options to finance new siding for your home.
Whenever you pay your mortgage, you're likely increasing your home equity.
Home equity loans enable homeowners like you to access that equity now instead of when you sell your home in the future.
The basic calculation of your home equity
The home equity calculation is the difference between your home’s current market value and the outstanding balance on your mortgage.
For example, if your home is worth $450,000 and you owe $250,000 on your mortgage, you have $200,000 in equity.
How a home equity loan works
An approved home equity loan gives you access to a lump sum of money based on the equity you've paid into your home.
This loan is secured by your property, which typically allows for lower interest rates compared to unsecured loans
Home equity loans come with a set interest rate and fixed repayment terms, making it easier to budget for your siding project
Benefits of home equity loans for siding financing
Lower interest rates
If you compare home equity loans to credit cards and personal loans, you'll often find they have better interest rates.
This makes them a more cost-effective option to finance your siding replacement.
Fixed repayment terms
With fixed interest rates and repayment terms, you’ll have predictable monthly payments, simplifying budgeting and financial planning.
Potential tax benefits
In some cases, interest paid on a home equity loan—so long as it's used for certain home improvements—could be tax-deductible. Consult with a tax professional to understand how this applies to your situation.
Increased home value
Investing in new siding can significantly increase the value of your home, making it a wise investment.
Should you decide to sell your home, improved curb appeal and energy efficiency are attractive features for many potential buyers.
Steps to using a home equity loan for siding financing
- Assess your home’s equity: You can determine it by subtracting your mortgage balance from its current market value. This will give you an idea of how much you can borrow for your home improvement project.
- Research lenders: Look for lenders that offer competitive home equity loan rates and terms. MIDFLORIDA provides various home equity solutions tailored to your needs, ensuring you get the best deal possible.
- Apply for the loan: Submit your application to your chosen lender. Be prepared to provide documentation such as information about your existing mortgage, proof of income, and tax information.
- Receive your funds: If your home equity loan is approved, you’ll receive the agreed loan amount as a lump sum. Use these funds to pay for your siding project.
- Repaying the loan: Make regular monthly payments according to the repayment schedule. Since a home equity loan uses your home as collateral, it’s fundamental that you stay on top of your payments.
Financial complications with your home equity loan could jeopardize your homeownership, so review your financial situation carefully before committing to a home equity loan.
MIDFLORIDA has your home-siding financing solutions
Replacing a home’s siding is a significant investment—but one with the potential to improve its appearance, energy efficiency, and overall value, which are compelling reasons to consider this home improvement project.
Using home equity to finance your siding project offers several advantages, including lower interest rates, fixed repayment terms, and potential tax benefits.
Start your application with MIDFLORIDA
MIDFLORIDA provides home equity solutions to help you finance your siding replacement effectively.
Start your application with MIDFLORIDA today and take the first step towards upgrading your home’s exterior.
Contact us for personalized mortgage assistance and to explore your home equity loan options. Begin your journey to a beautifully upgraded home exterior.
MIDFLORIDA Credit Union does not discriminate against credit applicants on the basis of race, color, religion, national origin, sex, marital or familial status, age (provided the applicant has the capacity to enter into a binding contract), disability, sexual orientation or gender identity; because all or part of the applicant's income derives from any public assistance program; or because the applicant has in good faith exercised any right under the Consumer Credit Protection Act. It is MIDFLORIDA’s policy to observe both the letter and the spirit of the law.
