Guest post by Bret Engle
Be Ready Financially When Your Home Gets Hurt and Needs Help
Homeownership is a wonderful thing, isn’t it? Not only do you have a wonderful place to live, but also an important financial investment and something to be proud of. However, along with those positives comes a major worry. What if something were to happen to your palace?
That must have crossed your mind when watching the news and seeing just what a hurricane, flood or fire can do. Even a severe storm could send a tree crashing into your roof or flood the basement with water, and that would leave you with some major problems, not the least of which is how to pay for those extensive damages.
Think carefully about that now so when the day arrives, you’ll be ready. Here’s some advice on preparing financially and avoiding the worst.
Know the Risks in Your Area
If you live in the Northeastern United States, for example, there’s a good chance you’ll be hit with an ice storm at some point, and that brings its own special brand of damage that differs from weather events in other parts of the country. Learn what’s most likely where you live and take the necessary precautions.
Learn About Your Systems
That will help save some money when the time comes for upgrades or repairs as a result of weather damage, though it’s not necessary to become an expert. Your heating, ventilating and air conditioning, or HVAC, system is crucial to your comfort, so make that a priority. Find out what type yours is and the basic ins-and-outs of how it works by consulting an online guide – this site offers helpful how-tos for maintaining your HVAC and many of your home’s other systems.
Examine Your Homeowners Insurance
Above all, you need to know what the policy covers and what it doesn’t. For many, the latter unfortunately doesn’t include damage due to floods, earthquakes and landslides, which require separate policies, according to the experts at Braden Insurance Agency. Talk to your insurer to find out your details and purchase additional policies if you deem it necessary.
Look Into a Home Warranty
It wouldn’t cover major structural damage, but could save you a bundle when it comes to repairing or replacing the HVAC, electrical and plumbing systems, as well as major electrical appliances. The specifics depend on the policy, with basic coverage starting at around $300, says a writer with Realtor.com.
Start an Emergency Fund
This is the simplest way to pay the piper, but that still leaves the question of how much to save and where to put the cash. A writer with Generation X Finance recalls spending more than $3,000 on home repairs due to major damage over three years, and recommends putting 10 percent of your monthly mortgage payment into a high-yield savings account each month.
Find Out About Government Aid
You may be eligible to receive funds for home repair. To find out, visit Grants.gov, hit “Search Grants,” and see what’s available under “Individuals.” Your chances for assistance are greater if the damage is due to a federally-declared natural disaster, such as a hurricane or a forest fire.
Tap into Property Wealth
It could be necessary if your savings don’t cover the damage and you’re not willing to use your credit card. With a home equity loan, you would receive a lump sum and then pay it back over a fixed term and at a fixed interest rate, much like a mortgage. Before you dive in, clarify the terms with the bank and how large the payments will be.
Locate a Qualified Contractor
You’ll need to do this relatively quickly to get repairs underway as soon as possible and reduce the amount of time you’re stuck living with relatives or at a hotel. Don’t rush things too much, though. Each candidate should be carefully interviewed after you’ve verified their licensing and visited their job sites to get a feel for how they work. It’s worth the effort.
There’s no telling exactly when a natural disaster or severe storm will hit your area, so start making plans now. You’ll be thankful you did if worse comes to worst.
Image via Pixabay.