As a homeowner, anything that goes wrong within your home is your financial responsibility. While some of these things are going to be easy to fix and won’t cost you a lot of money, other repairs are going to be very expensive and could put a huge dent into your finances. But when repairs need to be made, you’ve got to find some way to make them happen.
So whether you’re having to replace a screen in your window or you’re needing to service your air conditioner, here are three tips for financing large home repairs.
Tap Into Your Cash Reserves
The best way to manage home repairs financially, according to Tobie Stanger, a contributor to Consumer Reports, is to pay for everything in cash. Ideally, you should be putting away some money each month to build up a cash reserve that you can tap into when repairs become necessary. Because you know that someone will eventually need to get fixed, this can be a great way to always have at least some money at your disposal that you can use if you need it. Otherwise, you’re likely going to have to end up borrowing money or going through a more complicated process in order to gain access to the funds you need to complete whatever project you have to take care of.
If you can wait for a short period of time before making the repairs and you know that you have some equity in your home, Laura Mueller, a contributor to Moving.com, shares that you might want to look into doing a cash-out refinance of your existing home loan.
With a cash-out refinance, you’ll essentially be exchanging your current home loan for one that’s bigger and allows you to get cash for the amount that you’re borrowing over and above what your home is worth. While this can give you the funds you need, it can also require you to pay for the process of refinancing your loan in addition to paying more money each month for your mortgage to cover for this money you’re borrowed.
Get A Loan
For times when refinancing your home loan isn’t an option, you can always look into borrowing money in some other form.
According to Hanneh Gundersen, a contributor to Bankrate.com, you may be able to get a home repair or remodel loan, a home equity line of credit, a home equity loan, or even just a personal loan to get you the funds you need. You’ll wind up paying back the loan plus interest for all of these options, so make sure you think long and hard about the personal and financial ramifications of your decision.
If you’re needing to find a way to finance large home repairs, consider using the tips mentioned above to help you gain access to the money you need.