We’re excited for your upcoming siding project. Replacing your home’s siding is not only great for your home’s functionality but can also refresh the curb appeal.  You’ve done the research and have chosen a siding contractor after comparing three to four estimates.

Now that you know who you want, it’s time to figure out how to best pay for the project.

A siding replacement and installment is an investment that can give a home a whole new look, as well as extend its longevity. The projects can range anywhere from $5,000 to $45,000 in a 2,500 square-foot home— depending on the material being used.  Whatever the cost, the reward is that it will, in turn, shield your home and act as a first defense against the elements. Below, find a roundup of the costs you need to anticipate:

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Downlow on the Down Payment

Though siding jobs vary from a full-on replacement to a repair, a typical number is about 20 percent of the final quote.

In some cases, siding contractors will offer discounts for paying in cash, but be wary— if a contractor requests a large cash sum upfront, it could be a scam and risks the homeowner being left unprotected.

Dollars and Cents

The best way to secure the lowest price for your siding project is to compare multiple contractor quotes. That’s why Modernize encourages homeowners to get multiple estimates before making a final decision.

If you want to pay through a payment plan, your contractor might offer their own so you don’t have to go through a bank. And if you do need to go through a bank, be sure you first learn about all of the financial incentives available to you both directly and indirectly in the form of loans or tax credits.

For instance, if you finance new siding and new roofing with a home equity loan or a line of credit, that interest could be deducted. In addition, if you install new siding as part of an energy efficiency upgrade along with other facets, at least part of the cost may be deductible. A siding replacement could also be eligible for a sales tax deduction.  

Understand Your Equity Options

Homeowners can often use their homes, whether mortgaged or not, as securities for loans to fund home improvement projects.

Two common ways to leverage your home for credit from a bank or other financial institutions include lines of credit and loans. If either of these are applicable in your situation, run it by your siding contractor. An experienced installer will have both expert and valuable anecdotal advice regarding these methods.

Home Equity Line of Credit (HELOC)

A home equity line of credit, otherwise known as a HELOC, allows homeowners to borrow money against their home’s equity. HELOCs are generally flexible but limited by a home’s value, and they also carry the risk of foreclosure.

A common reason homeowners take out a HELOC is for home improvement projects. In fact, The National Association of Realtors listed siding installation as one of best returns on investment.

Home Equity Loan

If a HELOC doesn’t seem like the right fit, the other option is a home equity loan – which lets a homeowner borrow money against the value of a home over the amount of any or all mortgages levied against the property. It’s sort of like a second mortgage, positioning the home itself as the security for the loan.

Whatever options you find suits you best, it’s a safe bet to talk it over with your contractor. Their experience with other homeowners in the area and specifically as it pertains to siding installation projects will be valuable when it comes to determining the best path forward for your own financing.

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