First off: Congratulations. You have done the research, determined that your home could bode well from an upgrade or even replacement of some (or more) of its windows and perhaps window frames, and have chosen a windows contractor after sifting through three or four estimates. Now it’s time to plan out how you will be budgeting for your home improvement project. You will want to save on the initial investment and in the long term.
Just by searching online for payment options and educational materials, you’re on the right path and now you’re in the right place. A windows replacement or upgrade is a costly, and worthy, investment—nothing and no one should push you to do anything you’re not completely comfortable with. When it comes to windows replacement payment options, whether you do so in cash or through financing, you should understand your options and be comfortable with the path you choose. A trustworthy contractor will walk you through each step and be glad to explain anything you want clarification for, from the reasoning behind certain costs to the myriad financing options at your disposal.
Discussing cost and payment options for your project with your contractor is one of your most valuable venues to a successful windows installation, whether you take out a loan, pay in cash, or make use of federal incentives and assistance packages. Use our guide to familiarize yourself with the windows replacement financing universe and use it as a launching pad for conversations with your local contractor.
Windows Replacement Payment: The (Window) Ball Is In Your Court
You don’t have to feel like your contractor is doing you a favor.
Replacing the windows in your home or business is a sizable investment. Depending on what you choose—from the type of windows and material to glazing options, energy efficiency ratings, and the number of windows being replaced, a new window replacement can range anywhere from $3,000 to $15,000—or more. Contractors are aware of the lucrative nature of the work and are competing for your business. It’s okay to expect the contractor to handle the bulk of the work in reducing costs before your window replacement project even begins—after all, one of their value propositions is expertise in the field and local knowledge about getting the most out of local, state, and federal rebates and incentives.
And in case you’re wondering: Yes, you should certainly negotiate. If you can pay a lump sum, your contractor might be open to giving you a discount. 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.
Understand Your Home Equity and the Doors It Opens For You
Homeowners are often able to 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 institution include lines of credit and loans. If your budgeting puts these payment options on the table, run it by your window installer. An experienced contractor 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 since they behave like lines of credit (as with a credit card) but limited by a home’s value, and they also carry the risk of foreclosure.
Home Equity Loan
In contrast to a HELOC, this loan allows a homeowner to borrow money against the value of a home over the amount of any or all mortgages levied against the property. Since the home itself is the security for the loan, it can result in large amounts of borrowed assets. For all intents and purposes, a home equity loan is a kind of second mortgage.
Whatever options you find suits you best, you may want to discuss it with your contractor. Their experience with other homeowners in the area and specifically as it pertains to window replacement installation projects will be very valuable in helping you determine the best path forward for your own financing.
Consider a Property Assessed Clean Energy (PACE) Loan
PACE programs are mechanisms by which private property owners —homeowners like you— can more easily finance energy-efficient and renewable energy improvements on their property and using private sources of income.
According to the Department of Energy, you can pay for home energy-efficiency specific improvements—window replacements among them—without a large up-front cash payment. You will then repay for the improvement costs over a set time period just like with a loan over a decade or two pending your finances—as always, be sure to run through an option like this with your contractor to get guidance about your best option here.
“As of 2017, over 150,000 homeowners have made $4 billion in energy efficiency and other improvements to their homes through PACE financing,” according to the DOE.
The loan is tied to your home, not you, which means you can sell it along with your home if that day ever comes. Interestingly, the added value your home will gain as a result of your window replacement or upgrade incentivizes both you and a potential homebuyer in the future. Most importantly, perhaps, a PACE loan incentivizes you to charge ahead with a home improvement project like a solar panel installation without having to wait for the resulting savings to specifically show a return on your investment.
Nor should you expect them to be realized in order to decide to invest in the upgrade—improved windows are not going anywhere.
Lean Into Federal Programs For Window Replacement Installations
The ENERGY STAR Program is a volunteer-based resource from the Environmental Protection Agency that is designed to help homeowners save money on home improvement projects, as well as other endeavors, that aid in protecting the climate.
It covers a slew of home improvement projects, from insulation to central air conditioning and window replacements or upgrades.
“You do not have to replace all the windows/doors/skylights in your home to qualify,” the ENERGY STAR site explains about tax credits. “And it doesn’t need to be a replacement either – installing a new window where there wasn’t one previously (like in an addition) qualifies.” This, like other programs from government agencies, might be beneficial to your own home improvement project. It might also be overkill or conflict with another financial incentive or program.
Before signing up for or into any program, loan, or financial incentive otherwise, consult your local and experienced contractor on whether that is the right move for your window replacement project.
Whichever direction you choose to fund your home improvement project, discussing costs and window replacement payment plans with your trustworthy window installer will give you an intimate and specific foot up on saving the most both in the short term and the long.