Installing a swimming pool in your yard can provide enjoyment and value to your home. According to HouseLogic by Realtors, adding a pool to your backyard can also increase your homes’ value by up to 7%. However, there are several aspects to contemplate before proceeding with the backyard pool renovations such as the costs, the value of your home and the time it will take to complete the project and pay back a loan.

When does installing a pool make financial sense for you?

• If you live in a high-end neighborhood and the majority of your neighbors have pools it may be a good idea to install one as well. If not, it may be harder to sell your home when the time comes.
• If you live in a sunny state like California, Hawaii, or Florida, having a pool can really increase your property value.
• If your yard is big enough for a pool and still has space for grass or a garden.

However, installing a pool is a lengthy and expensive process. A new pool costs roughly $25,000-$50,000 and can take anywhere from 2-8 weeks. There are also some additional costs of owning a pool which should be added to your monthly budget when you decide to implement a pool, totaling on average $5,000 annually. These costs include an increase in homeowners insurance, pool-cleaning equipment or a cleaning service, water and water treatments, lighting, pool covers, and heating the pool.

Financing can be one of the best ways to get the job done if you decide to move forward with the project. 

With LoanGlide we want to help you choose the options that work best for you by showing you offers from multiple lenders at no impact to your credit score. You can look through offers based on what’s important to you like interest rate, payment amount, or length of the loan.

To finance a pool you will need to take out a personal loan. Interest rates on these loans are typically higher but faster to acquire. When taking out a personal loan, make sure you choose a payment plan that fits in your monthly budget, and make a plan to pay it off.

Benefits of taking out a personal loan instead of a home equity loan:

• There are fewer upfront fees. Most lenders offer no origination fees.
• The funding time is faster. For example, with LoanGlide lenders you can receive funding as soon as the same day.
• There is less risk. While there are defaulting consequences, you are not putting your home on the line.

Personal loans are given on certain criteria which should be considered when applying. Approval is based on credit, the credit range differs by lender but you will need good to excellent credit to qualify for low rates and favorable loan terms.

How big of a loan should I take out to finance my pool?

How much you choose to borrow in financing your pool depends on multiple factors, including how much debt you’re willing to take on as well as how much you can actually afford. The return on investment for your pool is uncertain and depends greatly on the market value at the time you wish to sell your home.

When deciding how much to borrow, you should look at the interest rate that you’re willing to pay and if the monthly payments fit into your budget. You will also need to assess the total costs of your loan and make sure they aren’t unreasonable for your income and the value of your home. For example, taking into account the factors of when installing a pool makes sense. You also do not want to spend more money on implementing a pool than your home is worth since your home will only increase in value by 7%, at the most.

Finally, consider the materials and the type of pool you are hoping to build. You may want to opt for a less expensive option or save up for a down payment and borrow a smaller loan amount to cut the monthly costs.

Here’s all you need to know about financing your pool, including loan providers and calculating the costs.

Next steps

After considering all the variables, it is up to you to decide if installing a swimming pool is worth the time and investment. Here are the next steps to take.

First, weigh all the financial considerations, like the cost of pool financing and the expense of maintaining a pool. Compare those versus the benefits like the value increase of your home, as well as your comfort and quality of life. Second, consider saving up to pay for your pool or to make a down payment to reduce the loan amount which can cut the interest rate that you have to pay. Finally, if you do decide to borrow, get prequalified and identify the best possible loan offer for you based on interest rate, payment amount and term length.

Resources

https://www.fool.com/the-ascent/personal-loans/how-to-finance/swimming-pool/

https://www.creditkarma.com/personal-loans/i/things-to-know-pool-financing

https://www.nerdwallet.com/best/loans/personal-loans/swimming-pool-loans

https://www.investopedia.com/best-pool-loans-5080790#citation-1

https://www.houselogic.com/by-room/yard-patio/what-to-consider-before-building-pool/

https://www.acornfinance.com/outdoor/pool-financing/