Owning a home is a dream come true for many of us. That’s why it’s so important to maintain your home – to preserve your dreams, not to mention the only roof over your head.
But, when it comes to emergency home repair, you may not be prepared financially which can cause you to put off something that could cause more damage later. This is a major no-no. Of course, there are some minor home repairs that can wait but if you’re facing an emergency, you will need to think fast and find the money for it, no matter what.
Aside from calling up relatives, there are some options available to almost anybody to pay for emergency home repairs. Accessing the necessary funds depends on a variety of factors but take a look at the following alternatives to leaving the repair undone.
9 Ways to Easily Pay for Emergency Home Repair
Whether you’re looking at a new roof or a new HVAC system, the costs are indisputably more than what most people have laying around. Furthermore, you should expect an emergency home repair within the next 12 months at any time during your tenure in a home, especially if it’s over 10 years old.
So, how will you pay for it? Don’t despair, there is relief available!
1. Home Improvement Loan
A home improvement loan may be any type of loan that you obtain for the purpose of a home improvement project, emergency or not. You can look at personal loans, both secured and unsecured, that offer varying terms and payment plans.
If you have shaky credit, check out the loans offered at Bonsai Finance. They can help you get your project off the ground while building your credit at the same time.
2. Homeowner’s Insurance
If your home was damaged as the result of a storm or other natural event, you may qualify to use your Homeowner’s Insurance policy. Contact your agent or insurance company and ask for a home repair estimator to assess the damages and refer your claim.
Home repairs that are generally covered by insurance policies include roofing, windows, and in some cases plumbing.
3. Home Equity Line of Credit – HELOC
A HELOC is a common way to pay for home renovations if you have available value in your home. You will need to contact your home loan lender in order to process the line of credit which could include a credit check and other income verifications. One of the questions the lender may ask is how much do home your renovations cost?
4. Cash-Out Refinance
Another way to use the equity in your home is by taking cash out in a refinance of your mortgage. Be careful to weigh the pros and cons of refinancing your home in order to access cash, paying close attention to your interest rate and closing costs.
One problem with refinancing is that the process can take time, especially if you shop for lenders and/or problems arise in the underwriting process.
5. Credit Cards
Most of us have a credit card or three on hand and at least one without a balance which can be tempting to use in an emergency situation. While this is an option, you should be careful not to max out your credit limit and keep your interest rate in mind. Also keep in mind that your credit report will likely be dinged, especially if you use more than 30% of your available credit limit.
Believe it or not, whether you have small home renovations or a larger than life emergency project, there is free money available from the government. The process for obtaining one can take a while so it’s an option best reserved for projects that can wait at least a few months, but in most cases, it’s well worth the wait!
Check out the U.S. Department of Agriculture which offers grants in the ‘Very Low-Income Housing Repair Program’ and the Rural Housing Repair and Rehabilitation Grant.
7. Government Assistance
Besides grants, there is also government assistance available if you meet certain criteria.
The U.S. Department of Agriculture is also extremely involved in these programs. Also, check out the Department of Housing and Urban Development.
8. Disaster Relief Programs
If you’re stuck wondering how to fix a house after a natural disaster and your homeowner’s insurance policy doesn’t cover the costs, you may be eligible for Disaster Relief Programs. These programs are offered by agencies like the Red Cross and the Federal Emergency Management Agency (also known as FEMA).
Before you use the money that these agencies may provide, make sure you are prepared with a list of what your projects require.
9. Community Development Programs
Finally, low-income house repair assistance is also available from both the local and state level. There are comprehensive stipulations surrounding the availability of these types of funds and you must qualify according to your income. Evaluators will also consider the magnitude of your required home repairs.
Emergency home repair doesn’t have to come directly out of your savings account. Although, it’s a good idea to keep some funds in savings for this type of occurrence. This will help you avoid using credit cards as a first or last resort.
We hope you found this information helpful, whether you are facing a home improvement project or just being curious. Don’t forget to come back and check out the rest of our blog for tips and tricks for life and living!