Financing your new HVAC system
If you are like most people, you want to know the best way to finance a new HVAC system. Unlike electricity and water, heating and cooling systems don’t have to be paid for regularly. While this has obvious advantages in terms of cash flow planning, it can also make financing your new system difficult or even impossible.
What is HVAC financing?
HVAC financing is a way to ease the cost of your new system and help you enjoy more comfort sooner rather than later with monthly payments. Suppose you have a loan payable for it, even better because you are essentially paying for your system twice as fast over a shorter period. Any time you can make 2 payments at once, you save money!
What are the different financing options available?
- Home Equity- Line of CreditYou can take out a home equity line of credit, a secured loan with lower interest rates than unsecured debt such as credit cards. You’d need to have enough equity in your property to do this. If you don’t have the full amount that you want for your new heating system, a home equity
- Pay for the installation in monthly installments-Most homeowners don’t have enough cash available to pay for a new HVAC system upfront on their own, so they opt to borrow money from banks and other lending institutions. The total cost of a new HVAC system in Atlanta usually ranges from $4,000 – $10,000, depending on the type of system that you install. If you have the cash available, this will be your least expensive option because it is usually cheaper to get a loan and pay off the cost in monthly instalments (assuming that your mortgage rate is below 7.5%). When deciding how much to borrow for your new HVAC system installation costs, you will need to take into consideration the down payment, any discount rewards you want to receive from your contractor (such as a free solar panel), and any extra fees that the bank may charge for the loan.
- 3. Get a loan-
The two main types of home improvement loans are:
Home Improvement Loan – When you apply for a Home Improvement loan, you will need to specify the purpose of your loan. Your lender will most likely require you to fill out an application that underwriters will review before approval. If approved, the amount that you can borrow in your Home Improvement Loan depends on your income, assets, and debts. Some lenders will allow you to borrow more than 90% of the after-improved home value, which is subject to maximum lending limits.
- HVAC in house financingIf you are in the market for a brand-new heating system, consider applying for home financing. The process of securing home financing has become much easier and more accessible in recent years. So, what does that mean? It means that instead of making monthly mortgage payments to a bank or credit union, you can make them to your local HVAC contractor. Your new HVAC system will be like having a mortgage on your home, only much more pleasant.
What should I consider before financing?
Before you make any decisions, there are a few things to take into consideration like the quality and brand of equipment you want, type of system (split or central), your energy usage per month, length of financing available, possible interest rates on your loan payment (if applicable) and most importantly, the customer support of your HVAC equipment dealer.
What should I look for in a financing program?
Pick one that has flexible terms, so you have wiggle room if you need to make changes down the road. Find out how much money is available on loan or lease, and there is a fee if you decide to upgrade or change systems. Also, find out how much it will cost to get the system installed and the full price of your purchase.
How long does financing an HVAC system usually last?
This really depends on your needs, but the most common are 3, 5, and 7 years. The shorter the time period, the more interest you will likely have to pay on your loan or lease payment.
Benefits of HVAC financing – the good stuff
You get a new system immediately, you are not locked into contracts for purchasing or leasing, and you can upgrade to an even better one if something newer comes out that suits your needs.
Why you should consider it for your new HVAC system purchase-
It’s a great way to get the system you want and help you save money with monthly payments instead of paying it all at once from a loan or pay one lump sum payment if you have sufficient cash available to do so.
Contact a financing company to begin the paperwork process and obtain quotes from your dealer for all equipment prices. Often times there is no fee for this service either, so it becomes a win-win situation!