You wouldn’t know when the next disaster will strike, especially if you’re a homeowner. There are times when you need to do a few emergency repairs, which can take a toll on your monthly budget.
Emergency house repairs are financial challenges that always catch every homeowner by surprise. Nerd Wallet says that at least 65% of homeowners admit that their homes need some repairs to ensure that it’s safe or at least free from any expensive damages. But when home repairs are urgent, and you don’t have enough cash to cover the costs, are there ways to cover the expenses?
HELOC
Home equity lines of credit, otherwise known as HELOCs, refers to the borrowed amount against the property’s equity that you have in your house. With HELOCs, any mortgage lender will use your real estate property as collateral to ensure the loan. What makes it different from other home equity loans is that the mortgage provider will provide you with a credit line that limits the amount you can borrow several times instead of giving it to you in one lump sum. This option provides you with a much better grip over how much you’ll borrow and the amount you’ll return.
Government loan
Another option that you can consider is government loans. Both the Limited 203(k) and FHA 203(k) allows borrowers to either purchase or refinance a property together with additional funds to cover any repairs or possible renovations.
Another option that you can consider is the USDA Section 504 Home Repair program. It’s an excellent option for homeowners with meager incomes to repair or renovate their houses. This option is also available for homeowners who are at least 62 years old or even older.
Credit card
Meanwhile, if you’ll only be doing minor repairs, then it’s only sensible enough to use your credit card to cover the expenses. However, you need to be mindful when using your credit card since the interest rate is relatively steep unless you’re in the introductory phase. You need to ensure that you can pay off the balance immediately, or else you’ll need to pay the high-interest payments.
Personal loan
Meanwhile, for emergency home repairs that are quite affordable, getting a personal loan is a practical choice. Since almost every bank offers it to potential borrowers, it’s relatively easy to come by, even when you apply to credit unions or even online lenders. What’s even great about it is that it has a high approval right, too. You can also get the funds the next day if you’re in a hurry. However, to get your loan approved, you need to ensure that your credit score is in good standing, or else you might need to pay a higher interest rate.
Emergency repairs at home can be stressful, especially if you don’t have enough funds to cover it. That’s why it’s always best to know all the possible options if something happens to your house. Also, make sure that you compare all the available financing options so that you can get the best interest rates.