Your HVAC system is a very important part of your home. This is what maintains the comfort of your home’s indoor environment. Your HVAC system not only controls the temperature in your home, but it also controls your ventilation and humidity. Due to the importance of this system, it can come at a high cost if you need to repair or replace the system. It can be a high upfront cost, however, there are usually financing options depending on your circumstances and the HVAC professionals you are working with. Let’s take a look at some of the pros and cons of financing your new HVAC equipment your home needs.

Pros & Cons Of Financing Your HVAC System

Pros

Avoid Upfront Cost

The main reason you would want to finance your HVAC system is to avoid a large upfront cost. Even if you have the available funds, a loan will help you keep your capital in the bank.

Energy Savings

Greg Dallaire of Green Bay WI Real Estate offers this suggestion: A loan for your HVAC system can help cover the costs of obtaining a more energy-efficient unit. This will save you thousands of dollars in your energy bills over time. If your energy savings is higher than your premium and interest, then you essentially save money. If you are hoping to do this, you need to purchase a system that has an energy star label. This equipment will have been tested for efficiency. Newer air conditioners will have a SEER rating. Furnaces and boilers will have an AFUE rating, and heat pumps will have an HSPF rating. These are metrics used to compare efficiency and energy output. The higher the efficiency level, the more likely your energy bill will be reduced.

Cons

The biggest con is that you will end up paying more for the system due to interest. Your initial payment is likely zero, however, you will pay interest on the total cost over the life of the loan. Your interest rate will vary depending on the loan type and your approval. Some homeowners choose to use a HELOC in these situations. This is a home equity line of credit.

Typically, these loans have lower interest rates and the repayment period is 10-20 years. The drawback to a HELOC is that you are placing a lien on your property, and this can be difficult If you plan to move r if you default you could lose your home in foreclosure. A financing option with a higher interest rate is going to greatly increase the cost of your HVAC system overall. Be careful and pay attention to what you agree to if you go with any of the above options. It may just be better for you to use your capital initially and replace those funds yourself over time. Everyone is in a different financial situation sp weigh the pros and cons depending on your family’s needs.

In Conclusion

Interested in financing to get the new HVAC system your home needs? Talk to a local HVAC company about your options.