1. Home equity loan
With a home equity loan, you can borrow from the value you have in your home. To calculate your home’s equity, simply subtract the amount you owe on your mortgage from your home’s market value.
Home equity loans are lump-sum loans that are repaid with a fixed interest rate in predetermined monthly installments, much like a personal loan.
The interest you pay on a home equity loan may be tax-deductible in some cases. However, because you’re using your home as collateral, you risk losing the home to foreclosure if you fall behind on payments.
Also consider: A cash-out refinance would similarly allow you to borrow against your home’s equity, though as part of a mortgage refinancing application.
2. Home equity line of credit (HELOC)
A home equity line of credit (HELOC) is similar to a home equity loan in that it’s a secured form of financing that lets you borrow from your home’s equity. Plus, the interest you pay may be tax-deductible. However, HELOCs come with a little more flexibility in that you can only borrow as much money as you need, and you only pay interest on what you borrowed.
HELOCs typically come with a variable interest rate, which makes it harder to predict your monthly payments. A HELOC may be a good option if you’re not sure how much you need to borrow.
Since HELOCs also use your home as collateral, you risk losing the roof over your head if you don’t make payments.
3. Pool company financing
Some pool installation companies offer financing directly to consumers or will arrange financing by forwarding your information to lenders. However, financing your pool through the installation company may be more expensive than other options, such as a home equity loan.
Before committing, it’s important to read the fine print. Ask about the APR, repayment terms and fees. Using the APR the pool company offers you, you can even prequalify and shop around for personal loans to make sure you’re getting a good deal without a credit check. Do your research to make sure this is your best financing option and that you’ve chosen a reputable pool installation company.