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Driveway Paving Financing

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by | Jul 13, 2021

Driveway Paving Financing

 

Why repave your driveway?

Driveways are often overlooked when tackling home improvement projects. However, driveways are a very important part of the exterior of your home. They can either make or break the style of the house. Think about your driveway as the first entryway to your home, a new driveway will create a grand entrance.

Driveways see a lot of traffic, especially if you also park your car outside. After a while your driveway will begin to show signs of stress, such as staining or cracking. Repaving is a great way to add a fresh feel to the exterior of your home.

 

How much does driveway paving cost?

The average price homeowners pay for a driveway repavement is $3,600, with prices ranging from $950 to $11,000. The cost of this project is dependent on a number of factors. First, the location of your home. The price will likely go up the closer you are to a major city. Second, the materials. The overall cost of this project will vary depending on the materials used.

 

Types of pavement

Gravel

Gravel is among the most durable of options for driveway paving. Gravel can last upwards of 100 years if properly taken care of. Gravel can do well in any climate condition, although if you live in an area with heavy rain there is a chance the gravel can wash away. The ideal gravel driveway is several layers thick, with total thickness reaching about 12 inches. Gravel requires less maintenance than driveways made of regular stone, concrete or brick.

 

Asphalt

Asphalt is on the cheaper side of materials when looking to repave your driveway. However, asphalt is not for every climate. Asphalt can begin to melt in extreme heat. Asphalt would be ideal for a cooler, sunny climate, as it will absorb the heat of the day and release at night. Asphalt is more durable and will not show damage as easily as other materials, meaning it can withstand heavier loads. On average an asphalt driveway will need to be replaced every 20-30 years.

 

Concrete

Concrete is a very popular option for driveway pavement. Concrete paving cost varies depending on your choice of style. Concrete can last in any climate, but will need some adjustments in climates that have multiple freeze-thaw months per year. In this case, it is recommended that you install multiple pavers, rather than a single slab, giving them room to expand. With the correct installation and management a concrete driveway can last upwards of 60 years. Concrete will give you the most options for design. Concrete can come in several different colors and designs, giving you many options for your home’s exterior style.

 

Pavers

Pavers are another popular driveway pavement option. Pavers are among the more costly options to pave your driveway because it is more labor intensive than other options. Almost half the cost of paving your driveway with pavers will go to labor. Pavers can thrive in all climates because there is plenty of joint space, allowing them to expand. Like concrete, pavers come in different colors and styles. Pavers require minimal maintenance and can last 25 to 50 years.

 

Brick

Brick, like pavers, can be very labor intensive, so much of the cost will go to labor. Clay bricks can weather extreme temperatures much better than other materials and can work in any climate. With the correct maintenance, a brick driveway can last up to 100 years. Brick is not the best option for families with large, heavy vehicles, as the weight can cause the brick to strain or crack. Brick driveways require more maintenance than other driveway materials. It is required to apply a seal every few years to help prevent cracks. Brick can offer many different design options as it comes in several different colors and textures.

 

Average price per sqft

 

Driveway Type

Average Cost of Material and Labor Per Square Foot

Gravel

$1 – $2.25

Asphalt

$5 – $9

Concrete

$3 – $10

Pavers

$10 – $30

Brick

$19 – $50

 

 

Options for Driveway Paving Financing

 

1. Personal Loan

A personal loan can be a good option when you are not liquid enough to pay for a project in cash or do not yet have enough equity in your home to leverage for a driveway repavement project. A personal loan is a type of installment loan. This type of loan is typically paid back in 12-84 months so it can offer a lot of flexibility. A personal loan can be a good option for someone with good credit or a good relationship with their bank or credit union. This type of loan does not require that you put anything up as collateral so you do not need to worry about a lien on your home as long as you make your payments. Interest rates for personal loans can be lower than those for credit cards or other types of loans. Interest rates for personal loans can range from 5 to 32 percent depending on credit and loan length, while credit card interest typically averages 18 percent. Generally, the better credit you have the lower the interest rate will be. One thing to keep in mind with personal loans is that the better your credit, the lower your interest rates will be.

Prepayment penalties: Some lenders don’t charge prepayment penalties, meaning you can pay off your loan early and decrease the amount you pay in interest.

 

2. Home Equity Loan

A home equity loan can be considered a second mortgage. A home equity loan allows you to borrow a lump sum of money using the equity you have built in your home. A typical repayment for a home equity loan is between 5 and 30 years.

You can calculate your home’s “loan to value” ratio by dividing the amount you owe by the value of your home. For example, you owe $150,000 on a home worth $300,000. That’s $150,00/$300,000 = 0.5 or 50 percent loan to value. This means that you have 50% equity in your home. After calculating your home equity, compare it to your lender’s maximum LTV ratio to see if you qualify for a home equity loan. After confirming that you may qualify for a home equity loan you can calculate how much you may borrow by multiplying the value of your home by the maximum LTV of the lender and subtracting your mortgage balance.

 

Pros & Cons

Home equity loans are great for people who want to fund home improvement projects because the interest you pay will be tax deductible if the money is used for renovations, according to BankRate.

 

Home equity loans offer competitive interest rates when compared to other options.

 

Pros

Cons

Low interest rates

Closing costs can be expensive

 

Fixed monthly payments

For those who want to pay it off fast, they have longer funding timeline than personal loans

Interest may be tax deductible

Risk of losing your home if you are unable to make payments

 

Home Equity Loan vs. Home Equity Line of Credit (HELOC)

Both home equity loans and HELOCs are secured against the value of your home equity. However, a home equity loan is a lump sum of money and a HELOC is a revolving line of credit, similar to a credit card.

A HELOC may be harder to secure than a personal loan or home equity loan therefore you need good credit and a high LTV ratio.

 

3. Credit Cards

Credit cards are always an option for financing home improvement projects. However, credit cards are likely to be the most costly option when financing your driveway repavement project. Moreover, the interest rates will likely be higher with credit cards, making them harder to pay off over time. Credit cards can be obtained regardless of credit issues and therefore can be the most flexible option for a broader range of credit histories.

 

Top Reasons for Driveway Paving

 

Upgrade For Style

If you are thinking about upgrading the exterior of your home, repaving the driveway goes a long way in enhancing the exterior styles. Pavers or brick driveways are a great way to add a little style to the exterior of your home. These materials allow for many different color and pattern options. For example, if you are going for a modern look for your home, grass block pavers are on-trend and give the home a fresh feel.

 

Curb Appeal

Repaving your driveway before putting your home on the market might be a good idea if your current driveway is showing signs of damage. A broken, cracked driveway will look dingy and deter potential buyers from the house. A freshly repaved driveway will attract prospective buyers to your home. Repaving the driveway is a good way to show your home is easy to maintain.

 

Other Factors to Consider:

 

Additional Costs

Subgrade

Grading costs an average of $4 per square foot. This includes setup, cleanup, grading the soil, and rock removal. If you have a sloped driveway, it is likely to increase the cost of grading.

 

Driveway Removal

If you are replacing your old driveway with a new one you will have to remove the existing driveway. You can expect to pay around $3 per square foot for the breaking up and removal of the old driveway. Breaking up and removing an asphalt driveway will cost more, ranging from $9 – $29 per square foot.

 

Functionality

Driveways see a lot of regular traffic therefore they need to be durable and suit your needs. If you have more big cars than small, a gravel driveway might be a better option for you. If you do not keep your cars outside, then maybe the style is more important. Whatever the case may be, make sure you are choosing the correct driveway pavement for your needs.

 

Heated Driveways

If you live in a climate that sees heavy snowfall, splurging on a heated driveway could save you the time and headache of shoveling snow before work or school in the morning. Heated driveways run an additional $12 – $21 per square foot, for the heating system. This does not include the price of a driveway paved over the heating system.

 

Would a driveway repavement increase the value of your home?

Whether you are planning on putting your house on the market within the next few months or the next few years, a driveway repavement is a good option for you. A new driveway makes the house look cleaner and increases curb appeal. A new driveway has the potential to increase the value of your home by up to 10%. Even if you are not planning on selling you home in the near future, a new driveway can be a good option because of its longevity. If well maintained a driveway can add a fresh look to your home for years.

 

The average ROI for a driveway repavement project is 75%. This means that if you spend $5,000 on this project, you could recoup $3,750 on the project.

 

Conclusion

Is it really worth it?

While you might not give a lot of thought to your driveway, potential homeowners certainly will. If you are considering putting your house on the market within the next few years, a driveway repavement is definitely worth it. If you are looking to upgrade the exterior of your home, a new driveway could go a look way in achieving your vision. Overall, if you are considering repaving your driveway, you should go for it.

 

 

References

https://homeguide.com/costs/driveway-paving-cost

https://www.landscapingnetwork.com/driveways/cost.html

 

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