Financing your swimming pool

[Trish29]

I'm new at this forum. Forgive me if this is the wrong board, but I could not find a board that discussed financing. Am looking into getting a fiberglass pool from San Juan and they offer financing through GE financial. Has anyone any experience with seperate financing aside from a second mortgage?.. If so, what terms were you offered?

I'm not keen on getting one with the interest rates the way they are now and too, I just built my house last year so I don't have all the much equity in it right now. I am having the mortgager send me information on how to get rid of the PMI (two years of PMI was way cheaper than taking out a second) and seeing if a pool qualifies as an "improvement".

Any information on this would be greatly appreciated.

[larry2338]

If you access to a Credit Union, they might have the best loan rates.

[ehorn]

Well I have to say that GE Financial is probably amoung the most common one for people to work with. First off yes a pool is considered an "improvement" as it will increase the value of your home. Usually you can finance up to 125% with a second mortgage if it's for improvement type loan, hard to get this if you are going to pull cash our or consolidate debt.

What I would watch out for is interest rates. GE is pretty competitve but it can also be good to shop around, don't just get one rate quote. I would suggest going to a few other sources such as a local credit union or some other major loan companies such as Countrywide or eLoan.

Unfortuantely not much you can do about the PMI unless you refinance your entire first mortgage and the first is 80% or lower from the current appraisal price of your home.

Anyways thats just the info I have from my own experience.

Good luck,
Eric

[GTakacs]

We did a 3rd mortgage at 7.24% for 15 years on our pool. We just bought our house in March and did an 80-15-5 to avoid the PMI. We got 5.75% on the first (30 year fixed) 8.25% on the second (15 year fixed balloon amortized over 30 years) and now 7.25% on the third (15 year fixed).

It really helped us that we just bought the house so our appraised value was what we paid for it. With the 3rd mortgage they let us borrow up to 125% of appraised value + 50% of the value of the improvement. This was more than enough. The whole thing cost $85 processing fee.

[Trish29]

Unfortuantely not much you can do about the PMI unless you refinance your entire first mortgage and the first is 80% or lower from the current appraisal price of your home.
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Naa.. With PMI you just request it to be canceled once the value of the home or the equity or a combination of both make it where you've reached 80% LTV. You don't have to refinance the loan in order to get it canceled.

Your other feedback was interesting though. I appreciate knowing about the 2nd and 3rd mortgage info as well.

[GTakacs]

Naa.. With PMI you just request it to be canceled once the value of the home or the equity or a combination of both make it where you've reached 80% LTV. You don't have to refinance the loan in order to get it canceled.

Unless you have an FHA loan, in that case you're screwed and can't cancel it like that.

BTW The low 3rd mortgage interest is what caused me to go with a pool builder instead of DIY. I was ready to build it myself but interest rates for self builders are sky high and wasn't worth it.

[PhantomAndy]

Obviously it's always best to try to save until you can afford to purchase the pool outright.

However, if you are going to finance it, do it as a home equity loan. This will allow you to deduct the interest that you pay on the loan from your taxable income, saving you money on your taxes. You won't be able to write off the interest on the financing with a finance company like GE Capital (Double check this with your tax advisor, I could be wrong).

We took out a home equity credit line to do our pool, but the processing was slow, and we started the process a little late. We ended up paying cash for our pool since we had enough (barely) to cover the payments as they came due. The home equity credit line was never used and closed a year later when we locked into a 5% 15 year fixed mortgage.

Good luck

[Trish29]

Unless you have an FHA loan, in that case you're screwed and can't cancel it like that.

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I have a conventional loan which I can request cancellation. I just don't know if they'll agree that all the improvements ie, fence, deck and brick walkway on the side house PLUS the pool will be enough along with the 5 percent I put down last year along with any value added appreciation will be enough to cancel it. We shall see. My mortgager is Chase.

[Trish29]

The home equity credit line was never used and closed a year later when we locked into a 5% 15 year fixed mortgage.
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wow.. that's a good fixed rate lock. The best one I've found so far is with Navy Federal and it's lock is at 6.5%.. all other's are higher percentages. But I like this alternative. I think I'm clearer now on what direction to take. I'm seeing about getting the PMI off the first mortgage then applying for this HELOC through Navy Fed. Deduct the interest on it come tax time. Seems like a plan.

[PhantomAndy]

Yes - 5% fixed was a great deal. I have a friend in the banking business, not that I got a better rate, but he called me when the rates hit 5% about 1 1/2 years ago, and we moved quickly to get that deal. Total savings for us if we keep the loan to term will be about $150,000 over our previous loan that was 30yrs @ 6.25%.

That was our 3rd refinance since buying the house in 1997 (started on a 30 @ 8.125%).

Rates are on the rise now - our current home equity credit line is at 6.75% so I suspect that the typical fixed rate loans are in a similar range for most buyers.

Good luck with your project - you will enjoy your pool no mater what option you choose to go with.