Owing a home in Chesterton is something that most if not all of us dream of. And why not? Having a place to call home is one of the best things that you can ever purchase for yourself. However, this valuable asset does come with some risks and responsibilities. Ultimately, everything in your house will break down. That is a fact, but when it does is a question for the ages. Clearly, most of the items in your house have an expected lifespan, but you cannot always rely on those time frames as anything can happen. A faulty drain pipe can flood your home, a storm can wreck your roof and windows or you may suddenly discover your furnace has reached the end of its life, sooner than expected. Considering that there will always be an emergency household repair, it is smart to have an emergency repair fund.
However, not everyone is always prepared and sometimes there’s no time to save for that fund. So, what do you do when you do not have savings and need emergency repair or renovation? Here are various options that can help you get out of that hole.
When it comes to acquiring much-needed money at a lower, fixed interest rate, personal loans take the crown. You can easily add the repayment to your monthly budget as the interest rate most likely will not change throughout the loan’s period. Another benefit of personal loans is that they are unsecured, meaning you do not have to put up any collateral. Also, you do not have to stick with banks and similar lenders as there are alternative sources like peer to peer lending platforms that lend you the money in no time. Ideally, some lenders will offer bad credit loans, enabling you to fix your home even with bad credit. The trick is to shop around to ensure you get the best rate possible.
Home Equity Line of Credit (HELOC)
A HELOC is simply a second mortgage that gives you access to funds of up to 85% of the current value of your home. The best thing about this option is that you can be able to draw the money over time, rather than getting it all at once. This is excellent if you are not certain how much the home improvement project will cost and how long it will take. Another benefit of taking a HELOC is that it usually has a lower interest rate as you’re using your property as collateral and may be tax deductible. The downside is that you will be exposed to a variable interest rate which can be hard to plan for in your monthly budget. Also, if you’re unable to pay the loan, it puts your home at risk.
There is also a chance that your home improvement project can be covered by your homeowner’s insurance. Damage caused by some disasters like a fire or a hurricane are usually covered by a standard policy. However, some disasters like earthquakes, sewer backup, floods, termite infestation and even construction work damage may not be covered.