How stressed do you get if disaster strikes when you’re short on funds. Unexpected emergency repairs come with a huge sticker shock. Whether it’s a leaky roof or a furnace that’s on the fritz, your budget can’t always handle the bill.
If you aren’t sure how you’ll be able to handle your emergency, check out this list below. These tips go over your insurance, payment, and borrowing options that might help lift you out of a crisis.
1. Turn to Your Homeowners Insurance
The time has come to pull out insurance policy to see what it covers. Depending on your package and your household issues, you may receive full or partial coverage for your repair.
There may be one drawback to having insurance bail you out. Insurance companies raise their rates on policy holders who use their services, so you may end up paying higher premiums in the future.
So how can you tell whether it’s worth having your insurance cover repairs?
There are a few situations when you may want to avoid filing a claim, such as:
- Your repair costs are equal to or less than your deductible
- You’ve already filed a claim some time in the past three years
- The damages are a result of your negligence
2. Unsecured Line of Credit
Repairing something like a faulty furnace may cost less than your deductible, but it may still be a challenge if you live paycheck to paycheck. For something relatively minor like an unexpected appliance repair, an unsecured line of credit may be the answer.
With an unsecured line of credit, you may withdraw, repay, and redraw funds as you need them. This makes it a convenient option if an HVAC specialist needs multiple visits to fix the issue. You won’t have to reapply each time they send you an invoice.
3. See if You Qualify for Government Aid
For larger emergencies, Uncle Sam might be willing to help you out in your time of need, provided you meet certain criteria.
An FHA Title 1 loan may be available for home improvement and repairs. This is a great option if you don’t have any equity in your home to lend against.
What’s the difference been one of a term loan vs line of credit?
With a maximum amount of $20,000 for a single-family home, an FHA Title 1 loan is designed to take on sweeping repairs. It may also be available for planned upgrades.
An unsecured line of credit is best used in unexpected emergencies. It tends to have a lower limit, making it ideal for minor repairs.
In an emergency following a natural disaster, get in touch with the Federal Emergency Management Agency. FEMA offers financial aid to cover emergency disaster repairs that your homeowners insurance won’t cover.
Act Fast, Act Smart
In an emergency, stress can get to you. But try to keep a calm head. There are plenty of options to help you repair your home to a place of comfort and safety.
Make sure you know your options before the next disaster strikes. Because although you may not have had to face an unexpected emergency yet, just wait. As a homeowner, you’re bound to deal with an issue sooner or later.
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