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Facing An Unexpected Major Home Repair Expense? Here Are 7 Ways To Cover Your Financial Dings

Facing An Unexpected Major Home Repair Expense? Here Are 7 Ways To Cover Your Financial Dings

Being a homeowner, you must be aware of the fact that your water heater may go anytime on the Fritz. It means you need to plan for other similar unexpected home repairs also. None of your appliance repair come in good time and can easily affect your monthly budget. For example, a new air-conditioner, refrigerator, new furnace etc.

According to a recent survey of HomeServe USA, approx 25% of Landlords don’t have money set aside for these unexpected wear and tear. Now, what next? It’s time to build up your own NerdWallet first aid kit to fix these emergency repairs.

If you’re a homeowner then you need to learn these 7 ways to cover your financial expenses.

  • HELOC Pronounced As Hee-lock

A ‘home equity line’ is a type of loan in which the lender lends an agreed amount for an agreed period of term. A HELOC is a low-cost, offers a flexible way to obtain the loan, but borrower should spend it wisely for his or her home improvements.

2)  Homeowners Insurance Protection

Check your homeowners insurance policy to know about the coverage of your home repairs. If you have a comprehensive insurance plan, you need not to worry much about major repairs.

3)      Government Loan Programs

The US agency, Federal Housing Administration (FHA) has announced various loan programs which also cover an additional amount for borrowers to meet for their home repairs or upgrades rather than investing on luxury items like gardens, fitness area or swimming pools etc.

4)       Development Programs

State,  local government or financial institutions are the administrator of these programs. For example, the leaders of a municipality often use community development block grants (CDBG ), a flexible program issued through  Housing and Urban Development (HUD) to provide emergency grants or loans to local homeowners.

5)       Disaster Relief

If your homeowners policy doesn’t cover your major  disaster home repairs, then you can ask FEMA (Federal Emergency Management Agency) or Red Cross, to offer funds for those repairs.

6)       Credit Card

Before you swap the card, think twice! It may not offer you enough credit, on the other hand, it can offer you a high rate of interest. So, be careful before you choose your credit card for major house repairs.

7)       Replace First Mortgage

A Cash-out refinance option can act as a lender of last resort for your emergency home repairs, however, it can take some time to get you a good refinance rate.

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