Question 1

How does a pool loan work?

Accepted Answer

While the process for obtaining a pool loan will likely look fairly similar to most other types of loan applications, there are some parts that are specific to swimming pool loans.
Step 1: First, before you begin the loan application process, you should have the following documents and information ready to share with the financial institution:Social security number (SSN)
Driver’s license number
Proof of employment
Proof of income
List of assets
List of liabilities
Step 2: The process begins when you submit a loan application. From there, your application will be reviewed and a credit check will be run. At this point, the loan will either be denied or conditionally approved. If you are conditionally approved, the lender will typically request documentation to verify your income (such as tax returns, W-2 or a recent paystub).
Step 3: Once this is completed and a copy of the signed contract between you and your pool dealer is in hand, loan documents are ordered and sent electronically. After the documents are signed and returned, your builder is given a green light to begin construction.
Step 4: If you’re getting a pool loan through a lender that specializes in pool loans, like Lyon Financial, they’ll be able to guide you through the process and answer any questions that you might have. They will also help facilitate loan disbursement, which for pools is usually done in stages as the project progresses.

Question 2

How does financing a pool into a mortgage work?

Accepted Answer

Homeowners often wonder if they can finance a pool into a new mortgage. The short answer is yes, but it will likely depend on your mortgage lender and specific financing terms. There are a couple of ways to go about combining your pool loan into a mortgage:
Factor it into a new mortgage: If you decide early on in the home buying process that you want to add a pool to your new home, you might be able to consolidate the cost of your new pool directly into your new mortgage. However, not all lenders will allow this, so you will need to ask to see if this is possible.
Refinance and cash out: Alternatively, if you already own a home and have a mortgage, you can potentially refinance your existing mortgage and cash out some of the equity in your home to pay for your new pool.
Take out a second mortgage: Another popular option is to take out a “second mortgage” in the form of a home equity loan.

Financing your pool in this way can help you get a better interest rate and streamline both the application and payment process.

Question 3

What are typical pool loan terms?

Accepted Answer

While specific loan terms may differ depending on your needs and circumstances, most pool loans have a term length of 1–30 years, with typical interest rates anywhere from 7.5% to 11%.
To get more information about specific loan terms, visit our partner Lyon Financial 
*Interest rates and terms sourced from Investopedia and Nerdwallet and are subject to change without notice.

Question 4

What is the average interest rate on a pool loan?

Accepted Answer

Interest rates for pool loans depend on a number of factors, including credit profile, loan amount and income.
Generally speaking, average pool loan interest rates fall in the 7.5–11% range. The interest rate you qualify for will largely depend on your creditworthiness.
Your lender can help you shop around for the best interest rate or you can use an online lender to shop around for rates yourself.
*Interest rates and terms sourced from Investopedia and Nerdwallet and are subject to change without notice.

Question 5

What is the average monthly payment on a pool loan?

Accepted Answer

Monthly payments on your pool loan will vary based on a number of factors, including the loan term, interest rate and amount financed.
For instance, a $30,000 loan over 84 months could cost anywhere between $400-$500 per month. A $40,000 loan over the same term would result in a monthly payment of $630 to $675, while a $50,000 loan would cost about $750–$850 per month.
However, if you extend your loan term beyond the standard 84 months, you can lower your monthly payments considerably, making a pool more attainable for many. The trade-off is that you will likely pay more interest on the loan over time.
For example, if you choose a 180-month loan term, your average monthly payment could be approximately $200-$300 less. If you finance $50,000, your payments might be around $515 per month. A $30,000 pool would cost roughly $310 per month.
You can also lower your monthly payment by putting a down payment to reduce the amount of money you’re ultimately financing.
Using a swimming pool loan calculator like the one Lyon Financial provides can help you get a feel for how these factors impact your monthly payment.
*Interest rates and terms sourced from Investopedia and Nerdwallet and are subject to change without notice.

Question 6

How long can you finance a pool?

Accepted Answer

The average length of a pool loan can range anywhere from 1-30 years, depending on your needs and how much you need to finance.
As mentioned, the length of time you finance your pool can have a significant impact on your monthly payments. If you choose a shorter loan term, your monthly payments will be higher, but you will ultimately pay less in interest. If you opt for a longer term, your monthly payments will be lower, but you’ll pay more in interest.
Five- to seven-year loans tend to be a popular choice, because they help spread the cost of the pool over enough time that your monthly payments are relatively low, but you don’t rack up decades of interest.

Question 7

What credit score is needed for a pool loan?

Accepted Answer

Typically, lenders are looking for a credit score of at least 660. As with any loan, those with good-to-excellent credit (740+) will get better interest rates and lower monthly payments.
However, even if you have “bad” credit, it may still be possible to get a pool loan. But, beware, as this will likely come at the cost of a significantly higher interest rate, adding to the overall cost of the pool.
When evaluating a loan application, lenders ideally want at least five years of credit history consisting of a variety of account types (such as mortgages, vehicle loans and major credit cards) with a record of consistent on-time payments.
Additionally, lenders will also consider your income and debt-to-income ratio to help determine your ability to repay the loan.

Question 8

How do I apply for a Lyon financial pool loan?

Accepted Answer

Start your Lyon Financial pool loan process by completing an online application. A member of the loan team and one of Lyon’s lenders will review your application. You’ll get a personalized response from a loan team member who will review all terms, conditions and work to pair you with a loan program that best works for your needs. You’ll receive a conditional approval within 24 to 48 business hours.

Question 9

How do I apply for financing with Lyon financial?

Accepted Answer

To qualify for financing with Lyon Financial, Lyon will evaluate your overall credit health. Typically, it looks for a debt-to-income ratio (DTI) of 60% or less, which will include the pool loan amount you are requesting. Lyon also looks at any negative blemishes on your credit report, including recent bankruptcies or liens. Lyon Financial will review your credit through a TransUnion report, however, its lenders may look to any of the other major reporting bureaus, including Equifax and Experian.
To ensure your credit does not take hit after hit, Lyon streamlines the qualification process by first running its credit check through TransUnion, then determining which of its lenders may best suit your needs. From there, that lender will run their own credit check. This is in contrast to other competitors who will run concurrent credit checks across multiple lenders, resulting in unnecessary hits to your credit score due to multiple inquiries.

Question 10

How does Lyon financial pay the pool builders?

Accepted Answer

Most fundings involve paying the pool builder directly in stages, according to the progress of the project. This ensures that the contractor is receiving the appropriate payments in the appropriate increments. In most cases, before each stage’s payment is released, we ask that you complete a brief electronic form to verify that the scope of work for that stage has been completed

POOL FINANCING FAQs