Sooner or later every homeowner faces the need for an emergency home repair. There are some home repairs that can’t be postponed such as when your hot water tank stops working or a pipe bursts or your roof is leaking. While dealing with unexpected emergencies is always challenging, it can be even more so if you think you’ll have difficulty paying for emergency home repairs.
Is it Covered Under Homeowner’s Insurance?
There are some emergencies that may be covered by your homeowner’s insurance policy, particularly if the damage was caused by a fire or a storm. Examples include a roof that’s damaged by high winds or a falling tree or water damage from a burst pipe. Since emergency home repairs can cost anywhere from $1,000 to $10,000 or more, it’s a good idea to check your insurance policy first.
Home Equity Loans or Lines of Credit
To pay for repairs that aren’t covered by insurance, you may be able to obtain a loan or line of credit against the equity in your home. This might be the best solution if you have a major repair on your hands that will cost $10,000 or more. You may need to have 15 to 20 percent equity available to be approved for this type of loan. Make sure you can afford the payments before taking out a home equity loan or line of credit because you could lose your home if you default.
Personal Loan
If the needed repair isn’t very costly, a personal loan is another option. This avoids the need to pledge your home as collateral. Another benefit of personal loans is that they can often be approved and funded by the next day when you have good credit.
Government Assistance
Government programs are available that may provide grants or loans for home repairs. To see if you qualify for anything, contact the Department of Housing and Urban Development or your local housing department.
Credit Cards
A credit card can give you the help you need when an emergency happens, and for any card you already have, the money is available right away. You may want to try to get a new card with an introductory rate of zero percent for a year or longer. Try not to max out credit cards for a home repair, because if your credit utilization rate gets too high, it can hurt your credit score.
Protecting Your Credit
It’s a good idea to always be proactive about protecting your credit. The better your credit score is, the more likely it is that you’ll be approved for an emergency loan or credit card if you need one. Make sure that the information on your credit report is accurate because errors on credit reports are more common than many people think.
If you find errors on your credit report, dispute them right away. For help with this process, partner with Dovly, an AI credit engine. We can help you track, fix and maintain your credit putting you in a better position to get the financing you need. Try it risk-free with our free membership tier.
