- Home equity line of credit (HELOC)
- Home equity loan
- Cash-out refinance
- Pool company financing
1. Home equity line of credit (HELOC)
With a HELOC, you can borrow from the home equity you’ve built, which is the market value of your home minus your mortgage balance. Once approved, you may borrow the amount you need, up to a maximum amount, on demand.
HELOC payments are based on the amount you’ve borrowed and typically come with a variable interest rate.
A HELOC may be a good option if you’re not sure how much you need and when you’ll need it. The interest 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.
2. Home equity loan
A home equity loan also lets you borrow against the equity in your home, but in this case, you’ll receive a lump sum of money upfront.
These loans typically come with a fixed monthly payment and fixed interest rate that’s usually lower than APRs on personal loans and credit cards. Like a HELOC, the interest you pay may be tax-deductible. But the same risks apply with a home equity loan because your home is used as collateral. If you fall behind on payments, you risk losing your home.
3. Cash-out refinance
With a cash-out refinance, you take out a new mortgage that’s larger than your current mortgage and pocket the difference. You can use the extra money for just about anything, such as pool financing.
You’ll repay the new mortgage over time with the new loan terms. This option may be ideal if you have a lot of equity in your home, but your new APR may be higher than it was on the original mortgage. That’s because the lender is taking on more risk as you borrow more equity in the home.
4. Pool company financing
Some pool installation companies offer financing directly to consumers or will arrange financing by forwarding your information to lenders. Some even offer buy now, pay later swimming pool financing. However, pool financing is usually more expensive than other options, such as a home equity loan.
You’ll find secured or unsecured options, with fees varying depending on the company. You may be barred from refinancing with a different company, which isn’t a common restriction among other funding options. Before committing, make sure this is your best financing option and that you’ve chosen a reputable pool installation company.