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Preparing for Plans B and C: Paying for Major Home Repairs

Updated: Jan 13, 2021

Major home repairs almost always involve substantial expenses, whether you’re ready for them or not. There’s no way around it - home ownership is, after all, something of a gamble. You don’t expect the pipes or the roof to leak, but it happens. Some people are prepared for the worst, but it’s quite common for homeowners to be caught financially off balance. When that happens, your options may be limited, and you might have to settle for an undesirable solution. Nevertheless, it’s important to know what your options are in case you’re forced to fall back on plan B or plan C.

Mold damage

Mold is a somewhat lesser-known form of household damage, yet its effects can be dangerous, even lethal. Prolonged exposure to mold can cause headaches, nausea, allergies, and lead to organ damage. It can be difficult to get rid of completely, because it grows in hard-to-find locations. But it must be removed completely to ensure your family’s health. The national average for removing mold is $2,227.

Look for a loan

Homeowners who don’t have enough in savings to pay for an emergency repair may find a home improvement loan the next best option. Of course, that depends largely on your credit standing. If you have a good score, it may well be possible to secure a loan on more or less favorable terms. In any event, you must be prepared to shoulder a monthly payment, so do your math carefully.


If the interest rate on your mortgage is higher than market rates, you could refinance your mortgage loan. That means lowering your interest rate and monthly payment, leaving enough extra cash to pay for home repairs. Of course, if you’re sitting at home with a damaged roof or water round your ankles, there probably isn’t time for a time-consuming loan process. Another option is to take out a larger mortgage and use the difference to pay for repairs, though time may be a factor here as well.

Credit card

If time is a factor, opening a credit card that allows you to cover the cost of a roof repair or pay for a new major appliance could be a better option. If you can obtain a card at a good rate, one that offers travel points or cash back, you could end up on the plus side, especially if you find a card with a 12-months-interest-free offer. However, you’ll face higher interest rates later on unless you can pay the balance off quickly.

HELOC If there’s enough equity built up in your house, a home equity line of credit (HELOC) will give you access to a revolving, open line of credit that can be used as needed. Some HELOCs give you 5 to 10 years to access this credit line, but remember that these are adjustable rate mortgages and the rate can fluctuate, so there’s an element of risk. Assess your financial position carefully before taking such a risk.

Home equity loan

A home equity loan usually has a fixed interest rate for the life of the loan, and provides money in a lump sum that can be used to cover a major home repair. Be careful, however, because home equity loans can be costly, with closing costs, transaction fees and, possibly, a penalty for paying the loan off early.

Financing a major home repair can be a difficult and stressful process. Some homeowners are forced to settle for a less-than-advantageous course of action, though there are plenty of options to pursue. Whatever you choose, always be sure there’s room in your budget to accommodate the financial burden.

Article Courtesy of Julian Lane

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