If you rent a house, your landlord should take care of this expense; but if you are the homeowner, then the financial responsibility is yours. Getting a new furnace or air conditioner can be a very costly expense and one most people do not plan for in advance. You are probably already stressed and confused by all the different components that go into making this big decision. Fortunately, there are a few payment options available.
The first option would be to pay cash, but not everyone has such a large amount of expendable cash on hand. Some contractors might offer incentives for a cash payment. Beware if a deal sounds too good to be true. Know your contractor before you pay cash.
Many people might consider charging the expense on their credit card. The interest rate on a credit card might be very high, so make sure you know what you will be charged if you decide to go this route. Beware of promotional credit cards, because of you don’t pay it off during the designated time, you could be hit with a much higher interest rate.
If you want to use a credit card to pay, but you don’t have one, then you will have to apply for one. Your interest rate on the credit card could be high depending on your credit score or it could be a variable rate.
Your HVAC contractor should let you know how much the complete new furnace or AC install will cost and what financing options are available. They might already have a working relationship with a bank or a PACE provider like Ygrene.
Using a bank might require you to submit an application and have a credit check run, and then let you know if you qualify and what the terms and interest would be.
If you choose to consider a PACE provider, like Ygrene, your payments will be added to your property tax. They will not do a credit check, instead they will be looking at the equity on your property. If you choose to move forward with Ygrene, you just sit down with your HVAC contractor, make a phone call, and an approval can be given in as little as 30 minutes. No more worrying, no more waiting!
In conclusion, weigh all of your options before you jump into such a large investment, but don’t wait too long. Sitting under layers of blankets in the cold of winter or sweating in the heat of your home is not ideal. The good news is that once you install that new energy efficient furnace or air conditioner unit, you can start saving money over time.