Repairs and Finances: The Hidden Costs of Homeownership

The average homeowner spends around $2,000 per year on home maintenance, which includes things like landscaping and minor plumbing repairs. This does not, however, take into consideration major repairs, such as roofing or HVAC replacement. Unfortunately, if you aren’t prepared, a busted pipe, faulty air conditioner, or rotted roof could cause financial panic. Cash for the Unexpected   Most people typically don’t have several thousand of dollars readily available for home repairs. But if you have home equity, you have an asset that can allow you to obtain cash quickly in case of an emergency. PennyMac USA explains that there are different loans to receive cash for remodel work, including conventional, FHA, and VA. A few benefits of using your home equity instead of an unsecured loan are that you may enjoy tax benefits, and you will likely have a lower interest rate. Even though your loan is secured with the equity on your home, it pays to take steps to improve your credit score before you apply.   Contractor Conundrum   There’s no shortage of contractors out there who are ready and willing to rip you off. Some have good intentions but lack the experience to adequately resolve your home repair problems. Before you pay someone to complete any job, check their qualifications and their references. The last thing you want is to trust major repairs, such as foundation problems or electrical issues, to a company that isn’t qualified to do the job.   Anything that could potentially affect the structure of your home requires extensive experience and a contractor who can do the work up to state and local codes standards. At the beginning of any job, always ask to see that they’ve pulled the proper permits and double check that the materials on-site are the same quality as were quoted. Some roofing contractors, for example, cut corners by using subpar materials underneath the shingles. Before it’s time for major roofing repairs, make sure to consult with a licensed roofing contractor in your area. This is especially important after a major storm, as there could be hail damage or water leaks you can’t see. You should also schedule an inspection if you notice that you have multiple missing shingles.   Regardless of which type of repair you need, your contractor, whether it’s a roofing company or foundation repair service, should always maintain an open line of communication with you and have an exceptional reputation within your community.   Saving for a Rainy Day   When we think about saving for a rainy day, we tend to look at it as a figurative statement. But when it comes to your home repairs, a rainy day can actually be the cause of your concerns. But aside from water intrusion, normal wear and tear, improper installation, and other avoidable and unavoidable issues will eventually require you to write a check. If you have not already, start saving money specifically for home repair and maintenance projects. Generation X Finance cautions that home repairs aren’t something you should only consider if you live in an older home. Plenty of things can go wrong even with relatively new construction.   You don’t have to start your saving efforts with enough to handle large repairs. Small actions, such as sticking to a grocery budget and shopping around for the best rates on auto insurance and credit cards, can help you stick a few dollars each month into an account dedicated to home repair emergencies. One of the easiest ways to set money aside is to have it pulled from your paycheck and automatically deposited into a savings account. also recommends taking steps to keep your household costs down, such as lowering the thermostat or downsizing to a home that most suited for the number of people in your immediate family.   The cost of homeownership is high. However, having money set aside – and knowing what to expect – will keep the hidden expenses from taking a toll on your budget.   Article submitted by Seth Murphy,  [email protected] Image via Pixabay

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