The pride of ownership, the personal sense of fulfillment, the complete freedom to create your dream home, living security, and the opportunity to build equity. These are just some of the many benefits that come with owning a home. But there are unexpected surprises that also come with owning a home and these are usually in the form of unexpected/unplanned repairs or upgrades.
You could have a professional inspect a house to make sure it's in top condition only to face an unexpected, and if you are unlucky expensive, repair shortly after moving in. Sometimes, the repairs are due to poor luck like a powerful storm damaging part of your roof or your HVAC system breaking down when all seems to be well with it.
This makes home ownership a lot more than just planning for how to pay your mortgage on time and in full each month. You need to have a plan for how to deal with unexpected home repairs and when it generally comes to home repairs, the adage "a stitch in time saves nine" is very accurate. You either fix the problem as soon as you can or risk the issue escalating and becoming more expensive to fix.
Whether you are a new homeowner or not, below are tips that can help you deal with unexpected home repairs.
Maintenance is Key to Minimizing Expensive Home Repairs
The simplest way to prevent or at least reduce expensive repairs to the barest minimum is to carry out preventive maintenance. Remember that a stitch in time saves nine? Fix small problems before they escalate into bigger ones? Is there a small crack in the wall? Fix it now. Is the room slightly leaking? Take care of it now.
Preventative maintenance requires conscious effort and the more effort you put into your home, the less money you are bound to spend on costly repairs. Many components in your home require regular maintenance and you can create a maintenance routine to make things easier for you.
Build an Emergency Fund
While every homeowner should set aside funds for emergency repairs, this is even more true for homes that aren't brand new. An emergency fund is exactly what it sounds like - a safety net for emergencies. While an emergency fund is meant for other purposes aside from repairs, you can make sure you don't spend much of your savings on home repairs by saving as much as you can.
The key to successfully building an emergency fund is to start saving. Try to set aside $100 each month or even less and try to increase the amount as time goes by. Whether it is unexpected house repairs or other emergencies, you'll be in a good position to deal with the problem financially.
Know What's Covered
Home insurance and warranties are popular among homeowners and the extent of coverage usually depends on the service provider and the subscription packages available. Both home insurance and warranty are designed to help homeowners with unexpected home repairs.
When it comes to home warranty, do your due diligence by carrying out in-depth research about different service provider's reliability and coverage. Services like Cinch Home Services provide extensive coverage and customizable plans. It's all about finding that service that will offer you maximum value for your money.
When you know all that's covered by your warranty or insurance plan, you'll know to contact the service provider for a claim should any component in the plan have issues. And this can save you significant amount of money in repairs or replacement.
Know Financing Options Available To You
From personal loans, home equity loans, and home equity line of credit (HELOC), there are a number of financing options. With HELOC, the lender grants you a line of credit based on the equity built in your home. For those not familiar with equity, it's the difference between the appraised/actual market value of your home and the amount owed in mortgage or any loan against the property.
So, as you pay your mortgage, you are also building equity into your home. Most lenders will allow you to borrow up to 90% of your home's equity. HELOC pretty much works like a credit card and you can draw on the credit line as needed and pay down over time to have more credit to draw from in the future.
Home equity loan is also based on the equity in your home but differs from HELOC in that you receive a lump sum and have a regular repayment schedule.
