If your heating and air unit requires expensive repair costs, you may in the market for a new system. Most homeowners have college funds or vacation savings accounts. We have yet to hear from any customer that they have been saving specifically for a shiny new air conditioner to show off to the neighbors. We fully understand replacing a new system may be a pain point, and expensive repairs are not the best option either.
You can expect to may upwards of $5,000 and up for new central heating and air conditioning. With the variety of options and upgrades, you may choose that financing for a new system is the best route! Make sure you take the appropriate steps and know the options before filling out any credit apps to be on the fast track to approved financing.
A New HVAC is your Choice - How to get Approved Financing
- Unlock Your Credit - With so many different credit protecting apps and programs, make sure that before you fill out any financing applications, your credit is unlocked for all 3 credit reporting bureaus. Each bank utilizes a different digital process and it may not be clear which criteria are used. You should allow 24 hours of open credit before applying.
- Will you Apply as a Joint Account or Single- Make sure you make this decision before you hit "submit" on the application. Applying multiple times with different criteria can raise a red flag. If you are using 2 incomes, then apply jointly. If the secondary applicant has poor credit, it may be most beneficial to utilize just the best singular credit and income.
- Know Your Numbers - What is the cost of the HVAC unit? Will you be putting some money down? When asked what the credit amount you need to borrow, make sure you know that number. Don't guess or forget your down payment. Even a small amount over the recommended risk, like $1,000, can cause a denial.
- Net or Gross? - Read the application carefully. The difference between your net and gross may be a large number when speaking of your income. Make sure you factor exactly what is being asked on the application.
- Price Shopping? Don't Fill Out Multiple Applications - It is natural to shop different companies for value, options, and pricing. What you should not do is fill out a credit application until you have made your choice. If you choose company 3, but already have applied for credit at companies 1 & 2, you may be denied. This can happen simply due to the frequent credit pulls. And NO, not all heating and air companies use the same HVAC financing. Ultimately, purchase your HVAC system on company reputation and connection. Review your options. Then apply for credit to see where you fall.
- Know Your Credit Score - So often we have spoken with customers who are certain that they have good credit and are hopeful for approved financing. They then discover they have sub 550 credit scores and are denied. Many factors go into your credit score such as credit longevity, balances, payment history, and credit usage. Among this long list of criteria, what you may think is a small thing such as 1 late payment, can drop your score 20 points. Each bank has their own "unsaid" minimum credit score for approval. Know your score and see if this falls above that minimum. It can save you time, frustration, and disappointment.
You're Denied Financing, What Now?
Now that you have followed these tips you should have approved financing right? After all is said and done, you are still denied. What now? You have a few options as a consumer buying a heating and air system. What we as
- Find a Co- Signer - Is there someone that you can trust that will help you get back to being comfortable by co- signing? Both parties will need to be present to sign on the application and final documents. Keep that in mind.
- Second Look Financing - There is a financing that is called "second look." It is meant for individuals that have credit scores less than the banks require. Most often, the criteria is to show a routine income and proof of steady employment. The downfall to this type of financing is a high interest rate. However, if you have a broken heater or air conditioner, this may be a good option for you that you can pay off quickly or refinance at a later date.
Is Leasing an Option?
Leasing a heating and air unit is a great way to have a new system without any repair or maintenance costs for the life of your warranty. A worry free comfort, all inclusive experience, without any headaches of unexpected and costly breakdowns. You will be required to fill out an application. The credit check has similar requirements as routine financing. Leasing a heating and air system may not be for everyone, but it does take the headache out of homeownership. Every 10 years, you get a new unit that is highly efficient and the most up to date with technology. You can see why this type of program has become increasingly popular.
To learn more about the financing options Guardian offers, contact our team at 770-727-1888. Schedule your free in home estimate today and install your new system tomorrow! Comfort is just that easy!