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Is your home’s exterior looking a little drab? Could your siding benefit from an upgrade? Are you interested in boosting the value of your home? If you answered “yes” to any of these questions, new siding may be sitting at the top of your to-do list.
But replacing your home’s siding can be a big expense (inflation’s a real you-know-what right now, amirite?), and the price tag on your project will drop or climb depending on which siding you choose.
New siding can be a smart investment if you’re planning to sell your home. New vinyl siding can increase the value of your home, and you can expect a return on investment of approximately 82%.[1] Even if you intend to stay in your home, a siding refresh can provide better protection and may increase your home’s efficiency.
Are you ready to get your home improvement goals in gear? Let’s look at some vinyl siding financing options to help you bring out your home’s exterior beauty.
6 Vinyl Siding Financing Options
When you pay for vinyl siding with cash, you save money because you’re not paying extra for financing fees or interest – but cash isn’t always an option.
Here are six ways to finance your new siding and a variety of home improvement projects (in case you were wondering):
Cash-out refinance
A cash-out refinance allows you to refinance your existing mortgage with a loan that is larger than your mortgage balance. You receive the difference between the new loan and your original loan in cash.
Because a cash-out refinance is a new mortgage, you will pay closing costs. It can take some time to get approved, and there is no guarantee that the interest rate you’re charged will be lower than your original loan’s interest rate.
If your credit scores are higher than they were when you first got your mortgage, that should increase your chances of getting better loan terms.
Home equity loan
A home equity loan lets you leverage your home equity to borrow a lump sum and repay it with fixed payments over time. A home equity loan is sometimes referred to as a second mortgage because it’s an additional, separate loan from your original mortgage.
Like a cash-out refinance, you’ll pay closing costs, and it could take a few weeks to get the funds. But the interest on a home equity loan is tax deductible if you use it to improve your home. Of course, your siding project would qualify.[2]
Before you opt for a home equity loan, take note that your house will serve as collateral for the loan. A lender can seize your home if you default on your loan.
HELOC
Another financing option that lets you tap into your home equity is a home equity line of credit (HELOC). A HELOC functions like a credit card. You borrow money up to your lending limit (which is based on your available equity) and pay it back over time. HELOCs are very flexible and can be a good option if you’re not replacing your siding all at once or you want to lump smaller projects in with your siding replacement.
A HELOC usually offers higher credit limits and lower interest rates than credit cards, making it an attractive option. But your home is the collateral for the loan, so be sure you can afford to repay what you withdraw.
FHA loan
Take advantage of government-backed Federal Housing Administration (FHA) loans to help you with your house siding project.
You can use an FHA 203(k) loan to buy a home in need of renovations or to refinance a mortgage when you need to make renovations (like a cash-out refinance). Your renovations must cost at least $5,000, you must hire FHA-approved professionals to do the work and the work must be completed under a specified time frame.[3]
You may be able to get an FHA Title 1 property improvement loan. You can get the loan without tapping into the equity in your home, but you must have lived there for at least 90 days.[4] You can also combine this loan with a 203(k) loan if your project cost is high.
Personal loan
If you’d rather not use your home as collateral for a loan, consider applying for a personal loan. Most personal loans are unsecured, so you don’t have to offer collateral to borrow money. Good credit scores and a steady, solid income can improve your chances of getting approved for an unsecured loan and scoring a lower interest rate.
Personal loans are typically approved faster than home equity financing loans (think: you get your money sooner), and there are no closing costs. But their interest rates may be higher, repayment periods may be shorter and you may not be able to borrow as much money. Keep all this in mind if you have to choose between a home equity loan and a personal loan.
Credit card
Using a credit card to finance your project is probably not your best option, but depending on your situation, it may work for you. Credit card interest rates can be much higher than the rates for other types of financing, and their credit limits are typically much lower than what you’ll need to finance a vinyl siding project.
But credit cards offer borrowing and repayment flexibility, which can be appealing if you don’t want to make large monthly payments. If you’re trying to save money, keep in mind, the longer you take to repay credit card debt, the more you’ll pay in interest.
If you need to apply for a credit card, look for one that offers a 0% intro APR. To avoid paying interest on the balance, try paying it off before the introductory period ends.
You may also find a home improvement credit card designed specifically for these larger expenses with a 0% interest promo offer or incentives for spending.
The Costs of Vinyl Siding Projects
Vinyl siding is one of the cheapest siding options. It’s also one of the most durable (lasting around 20 – 40 years) and the easiest to maintain. Bonus: You can choose from plenty of styles, textures and thickness options.
According to HomeAdvisor, vinyl siding can cost between $3 and $12 per square foot for material and installation, costing around $11,500 on average.[5]
The factors that go into the cost of replacing vinyl siding are:
- Home size: Vinyl siding is priced by square foot. The larger your home is and the more complex the design, the more it will cost. Make sure to account for the garage if you’re including it in the siding project.
- Location: Materials, shipping, labor and cleanup costs vary by location. Over the last couple of years, prices and delivery times have skyrocketed. Be prepared for price changes and start your project as early in the warmer months as possible.
- Siding material: The type of vinyl you choose and the brand will affect the price. The better the quality, the higher the price. Choosing a thicker or more textured vinyl will be more expensive than a thinner, smoother vinyl. Insulated vinyl – which is great for energy efficiency – is also more expensive.
- Labor and installation: It’s not uncommon for labor to cost about as much as the materials. If you’re on a budget and you know your way around a toolbox, you may be able to save some money by installing the siding yourself if your loan doesn’t require professional installation. While we’d never knock a money-saving hack, don’t forget that when you hire a professional, you’re reducing the chances of improper siding installation that can cause future issues.
Tips for Getting the Most From Your Vinyl Siding Project and Financing
We’ve put together some tips to help you get the best value from your vinyl siding project and financing options.
Compare quotes and vibe check everyone
Request quotes from multiple contractors and suppliers. Compare prices and check references.
If you have to pay for a quote, ask if the quote’s price can be credited toward your bill if you choose that contractor. Ask the contractor to outline what the job includes (time, labor, materials, etc.) in the quote.
Look at online reviews on the contractor’s website and home improvement listing websites like Angi. Has a newly sided home in your neighborhood caught your eye? Knock on your neighbor’s front door and ask them about their contractor.
Watch out for contractors who ask for a large amount of money upfront or only accept cash. Make sure the contractor is licensed, insured and has all the right permits – and get your contract in writing. Use the Better Business Bureau® website to help you scope out any scams or scammers.
Know where you stand
Once you know how much you’ll need to borrow, it’s time to choose your financing option.
Lenders (and creditors) will look at your credit reports, credit scores, income and debt-to-income (DTI) ratio during the loan application process. Knowing where your finances and credit stand before you apply can help you decide which financing option may be best for you. It’ll also give you an idea of which loans you qualify for and what your loan terms may be.
Estimate conservatively and save on flair
Let your quote from your contractor be your guide when you decide how much money you’ll need to borrow – and add tax. Renovations almost always go over budget. Add a little more to the loan’s dollar amount (aka wiggle room) to account for the things that will inevitably cost more or go wrong.
And while there’s nothing wrong with wanting the best or most stylish type of siding, if you’re looking to save money, buy smooth traditional siding. It’s cheaper than its textured counterparts.
Give Your Home a Face-lift
Installing new vinyl siding will protect your home’s exterior for decades, and you’ll earn a generous return on investment. Even if you’re not planning to sell your home, a fresh face-lift can enhance your home’s curb appeal and your enjoyment of your home’s exterior beauty.
Where you live, the size of your home and the type of vinyl siding you choose all play a part in how much the project will cost and how much financing you’ll need. The good news is you’ve got plenty of financing options to suit your finances and beautify your home.
National Association of REALTORS® Research Group. “2022 Remodeling Impact Report.” Retrieved July 2022 from https://cdn.nar.realtor/sites/default/files/documents/2022-remodeling-impact-report-04-19-2022.pdf
Internal Revenue Service. “Interest on Home Equity Loans Often Still Deductible Under New Law.” Retrieved July 2022 from https://www.irs.gov/newsroom/interest-on-home-equity-loans-often-still-deductible-under-new-law
U.S. Department of Housing and Urban Development. “203(k) Rehab Mortgage Insurance.” Retrieved July 2022 from https://www.hud.gov/program_offices/housing/sfh/203k/203k–df
U.S. Department of Housing and Urban Development. “ABOUT TITLE I PROPERTY IMPROVEMENT LOANS.” Retrieved July 2022 from https://www.hud.gov/program_offices/housing/sfh/title/ti_abou
HomeAdvisor. “How Much Does Vinyl Siding Installation Cost?” Retrieved July 2022 from https://www.homeadvisor.com/cost/siding/vinyl-siding-installation/
