Home FINANCE How to Afford a New Deck: 10 Deck Financing Options

How to Afford a New Deck: 10 Deck Financing Options

by Ragini Salampure
How to Afford a New Deck: 10 Deck Financing Options

There’s a reason why almost 50,000 decks are built in the United States each year. Decks are not only a place to hang out and soak up the sun. They can be excellent spots for parties and family gatherings. Unfortunately, a new deck can be a costly addition to any home.

The good news is that there are financing options for homeowners who want a new deck, but can’t completely afford it. In this article, we’ll provide you with everything you need to know about finding the funds for your new home improvement project. Let’s get started!

Ten Financing Options For a New Deck

In this section, we’ll go over some of the different options you have for financing your new deck. Some, like home equity loans and HELOCs, are popular methods. However, we’ll also include some lesser-known tips on how to cut back on your costs. 

  1. Home Equity Loan

A home equity loan allows you to use any equity you’ve already paid on your mortgage as collateral for a loan. This type of loan is ideal because it’s fixed-rate, low interest, and provides the user with a lump sum upon closing. In addition, it also comes with some tax-deductible interest.

However, it can be risky. If you don’t pay off the loan, then you can easily lose your house. As such, it’s a good option if you know how much the deck will cost. 

  1. Home Equity Line of Credit (HELOC)

You can think of a HELOC as a combination of a home equity loan and a credit card. Instead of a loan, you use the equity in your mortgage to borrow from a line of credit.

This option is better if you aren’t sure how much the deck project is going to cost since it allows you access to funds as you need them. Unfortunately, it does come with higher interest rates than a home equity loan. 

  1. Personal Loan

If you don’t have enough equity in your home yet, then you might want to consider a personal loan. These types of unsecured loans, also known as home improvement loans, are easy to apply for.

However, be aware that you won’t have much borrowing power with these types of loans. The interest rates will also be much higher. Still, it’s better than nothing — especially if your deck project is fairly inexpensive. 

  1. Builder Financing 

Many deck builders will offer financing options with a third-party lender that they’ve teamed up with. This option is ideal because it’s a one-stop-shop that adds convenience to getting a loan.

However, it’s also a bit risky because it relies heavily on the reliability of the contractor. As such, you should do your research on the builder company first. That way you know for sure whether or not they’re right for you. 

  1. Home Mortgage Refinancing

Like a home equity loan, home mortgage refinancing uses your home as collateral to borrow money. However, you shouldn’t take this option unless it’s going to reduce your interest rate. Typically, this financing option is reserved for larger loans, so it’s not worth it for a deck project.

Why? Because you would be spreading out debt over many years for a relatively small project. But, if it’s going to lower your monthly payments, then you probably consider it. 

  1. Credit Cards

Credit cards should generally be saved as a last resort for financing your deck project. Why? Because credit card companies charge some of the highest interest rates.

So, if you can’t make your payments, then it’s easy to fall into debt. Plus, this debt will affect your credit score and your ability to borrow in the future. Still, they can be a convenient option if you only have a little more that you need to borrow to finish your deck. 

  1. Construction Loan

Construction loans aren’t the best option if you’re just trying to build a deck. These types of loans are meant for ground-up projects.

However, if you’re renovating multiple sections of your home, and want to include a deck in it, then it might be a viable option for you. 

  1. Asking Family

If you plan on spending a lot of time with your extended family on your new deck, then you might want to consider asking them for money for the project. If you plan on doing this, then it helps to be as straightforward as you can be about paying them back and how long it will take.

However, this method can be unreliable. Many people feel awkward about loaning out money, even if it’s to other family members. It ultimately depends on the nature of your relationship with your relatives, as well as their financial situation. 

  1. Building It Yourself

This isn’t a viable option for people who don’t hand or don’t have experience with building projects. However, if you have the tools and the expertise, then you can save yourself some serious money.

Roughly two-thirds of deck building costs go toward labor. So, building it yourself will defer a lot of those costs.

  1. Using Affordable Materials

While this method won’t provide you with the money you need, it can help significantly cut down on costs. Look for specific types of hardwood that are affordable, like Cambra decking.

Or, consider alternative, non-wood material. Alternatively, you can also shop for a decking material that’s on sale or available through closeout. For example, Ipe Woods offers a variety of these types of decking material at a discount. 

Want More Content? Keep Exploring

We hope this article helped you find out some ways you can afford your new deck. As you can see, there are a lot of different options for financing this home improvement project.

However, the right one for you depends on your specific financial and loan needs. As such, do some more research and decide which option fits your current situation best.

Did you enjoy this article? If the answer is yes, then you’re in the right place. Keep reading to find more topics you’re sure to love. 

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