While there are many advantages to owning a home, there are also disadvantages. And one of the biggest disadvantages of owning is the cost of repairs.
Often times things go wrong unexpectedly in your home and you need to fix them immediately. If there is a big problem, it could be an expensive and complicated proposition. If you are considering major home repairs, follow these key steps.
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1. Take stock of your situation
First things first: think about where you stand when it comes to home repairs. Is your house habitable before repairs? Do you need to do them immediately to stay safe and comfortable in your property?
Do you have a relationship with contractors who can help you with repairs? And do you have any money saved to pay for your repairs?
2. Check your insurance coverage
In some cases, you need major home repairs after a loss that is covered by your home insurance. For example, if you have a fire in your house that destroys your kitchen, chances are your insurance policy will cover the cost of the repair.
If your insurance pays, the repair process can be very different. Contact your insurer to find out how to get a quote for repairs and to check reimbursement rules and contractors you can work with.
3. Research entrepreneurs
You may need a contractor to oversee major repairs, but finding one may not be easy. In today’s high-priced real estate market, many people are repairing their properties instead of buying new ones.
The quality of your contractor can make or break your project and have a huge impact on construction costs, so make a smart choice about who to work with. Ask for referrals from your coworkers, friends and neighbors. If they don’t have one, ask your local lumber yard or plumbing supplier.
When considering an entrepreneur, read reviews and ask lots of questions. You want to feel confident about working together on your home improvement project.
4. Compare quotes
Having an idea of what contractors are likely to charge helps you budget for your project and determine who to hire. It’s a good idea to get multiple quotes to make sure you’re getting a fair price. Compare apples to apples by seeing if the construction specifications include the same amount of work, using the same type and quality of materials.
5. Explore your financing options
Once you know how much your project will cost, figure out how to pay. For many people, it’s impossible to pay out of pocket – although that can be ideal, because you don’t have to worry about paying interest or getting approved for a loan. Otherwise, you will probably need to get a loan. The options include:
- A second mortgage, home equity loan, or cash refinance loan. Each involves tapping into the equity in your home to cover your repairs. The advantage is that the interest charges may be lower than other borrowing options and, depending on the circumstances, could be tax deductible. The downside is that closing costs can be expensive; the approval process can take a long time; and your house is being used as collateral, so it’s at stake if you can’t pay.
- A personal loan: Personal loans can also have competitive interest rates, although they are usually not as low as the rates for home loan options. The approval time is much faster, however, and closing costs may be minimal or non-existent.
- Credit Cards: Charging for home repairs can be extremely expensive because credit cards charge high interest rates. But you may want to consider correcting your credit card if you plan to pay off the balance in full before interest is due, or if you have a 0% promotional rate on purchases and can pay off beforehand. the end of the promotional rate.
If you find the right loan, the right contractor, and the right price, you can increase the chances that your home improvement project will go off without a hitch.