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Help I’m Broke! How to Pay for an Emergency House Repair

House Repair

An emergency house repair can strike unexpectedly making matters worse when you lack the finances to fix it. There’s plenty of assistance programs that can help

Do you remember how it felt to walk across the threshold of your first house? You were probably bursting with pride and bubbling over with anticipation of all the happy times you’d share with your family and the memories you would make. 

And then came the first emergency house repair — along with sticker shock at the cost.

While the joys of home ownership are many, one obvious advantage of renting an apartment rather than owning your own place is that when something breaks down, it’s not your responsibility to fix it. When you are a homeowner, on the other hand, repairs and their costs fall to you. If you’re already scrimping to make ends meet and pay the mortgage, a leaky roof, a problem with the septic tank or a furnace on the fritz can be financially devastating.

Not to worry. We’ve gathered up some outside-the-box suggestions for how to pay for emergency repairs even when you’re broke.

First, Check Your Insurance Policy

The very first step after getting an estimate from the repair person? dig out your homeowner’s insurance policy. Some repairs may actually be covered. One typical issue that is often at least partially covered by insurance is roof damage caused by a storm.

Disaster Relief Programs Could Help

Has your home been damaged by a disaster, like a tornado or a flood? If so, you may be eligible for relief from the Federal Emergency Management Agency (FEMA) or the Red Cross. 

In most cases, this type of relief pays for assistance with home repairs that are not covered by insurance. They won’t necessarily put you back in the lap of luxury, either; FEMA relief is generally intended to make your residence safe, sanitary, or otherwise fit to live in after a disaster.

Get a Helping Hand from Uncle Sam

The United States government might be able to help out in other ways, even if the disaster is limited to your basement or attic! Check out the Title I Property Improvement Loan program. These are FHA-insured loans that provide financing for major repairs and even replacement appliances.

Another option is the USDA Section 504 Home Repair program. If you live in a rural area and have a low income, the Department of Agriculture might be able to help you out with emergency plumbing services or other repair needs,   

Look Into Local Solutions

You may also be able to get help with emergency home repairs from state or local governments, or from local agencies or organizations. In some municipalities, there are grants available through the Department of Housing and Urban Development (HUD) for homeowners who require emergency assistance.

You might also be eligible for low-interest loans from these same local resources, or from financial institutions in your community. Check with your local Office of Housing or Housing Authority; they will be able to point you in the right direction.

While you’re researching how to afford the home repair you need, it might be worth your time to ask around. Churches or other charitable organizations in your area might have funds allocated to help people out when they’re going through a rough patch. 

Consider A Home Equity Line of Credit

Let’s go back to those pros and cons of being a homeowner for a minute. One of the definite plusses? Being able to call upon a home equity line of credit in a pinch.

A home equity line of credit is sometimes referred to as a second mortgage. Essentially, you are borrowing money by using your home as collateral. There are certain requirements; for instance, your home must be worth at least 15% more than the amount you owe on it.

Additionally, you will want to be absolutely certain you can pay this loan back, and on time. If you don’t, you risk foreclosure and losing the home you worked so hard to get. 

Check Out Cash-Out Refinancing

A lesser known alternative to securing a home equity line of credit is called cash-out refinancing. This option involves replacing your original home loan with another one that totals more than you currently owe.

So let’s say you have a mortgage of $100,000 but want to make home repairs totaling $30,000. Rather than take out a home equity line of credit or a new loan, you refinance your mortgage and get a new loan of $130,000. The extra $30K is paid out in cash.

It’s necessary to have equity in your house to qualify for a cash-out refinance deal. And again, this can be a risky maneuver if you’re in dire financial straits. Most people want to hasten the process of paying off their mortgage, not extend it.

You’re also going to be on the hook for the additional interest associated with the new loan terms, but it’s likely that the interest will still be lower than if you secured an entirely separate loan.

A Few Final Ways to Pay for House Repair

None of these options really work for you? Don’t want to put the repair on a credit card? There are a few last measures to look into.

You can try borrowing the money from a friend or relative, pick up an extra job to bring in a little more income, or sell some of your possessions to scare up some extra cash.

Crowdfunding might also be on the table if you aren’t too proud to ask your acquaintances on social media to kick in a few bucks toward your home repair emergency.

Repair companies may work with you to establish a line of credit or a payment plan, as well. It’s worth asking about. 

Closing Thoughts

One of the most stressful aspects of being a homeowner is waiting for the proverbial other shoe to drop. If you haven’t yet had an issue with your hot water heater, electricity, air conditioning unit, furnace, or roof, just wait. An emergency house repair is bound to become necessary sooner or later. 

With a little creativity, however, you can pay for the repair without too much heartache!

Need to sell your home? Take a look at this article for some helpful tips!

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