Seven Ways to Pay for Emergency Home Repairs

Emergency home repairs

Having a place to call home is the best feeling for anyone after working hard their entire life. However, these assets come with multiple expenses. Property taxes and mortgages are just some of them and are expected.

On the other hand, there are expenses that spring out of nowhere – home repairs. It could be a roof leak, a leaking pipe, or a kitchen upgrade and when they pop up, they can destabilize your finances.

According to a survey conducted by HomeServe USA, 25% of homeowners don’t have any form of savings to cover home repairs. The same survey revealed close to half of the homeowners interviewed had some form of repair in the last 12 months.

Chances are you fall in the 25% but the main question here is, “Without savings, where else can you get money to pay for emergency home repairs?”

Take a look at these seven options you can use.

1.      Homeowners Insurance

It’s possible that your insurance policy will cover some, if not all, of your home repairs. However, this will depend on the type of damage and what caused the damaged. For instance, your roof may be damaged by a strong wind, however, chances are the policy may cover only part of the costs.

Find a qualified inspector to assess the damage, and then contact your insurance provider if you’re unsure of what type of damages the policy covers.

2.      Community Development Programs

This is probably the cheapest way to meet the costs of an emergency home repair. Local or state governments, financial institutions, and agencies are some of the institutions that provide these programs.

Community Development Block Grants are an example of these programs offered by municipalities through HUD. They offer grants or loans to homeowners to help them cover emergency home repairs. In some areas, these programs give first priority to disabled and senior homeowners. Nevertheless, it doesn’t hurt to find out more information from local housing offices, housing authority, housing services or other related agencies.

While this may seem like a great way of meeting the costs, there are various restrictions associated with these programs. For example, your income limit must not exceed 80% of your local area’s average income.

3.      Government Aid

You can opt for the Limited 203(k) and the FHA 203(k) loan programs, which allow one to refinance or buy a property. The extra funds on top of the total borrowed amount can then go to home upgrades and emergency repairs.

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If you have little equity in your home, consider enrolling for the Title I loans offered by the Department of Housing and Urban Development. The FHA insures these loans and you can use the funds from this program to cover emergency repairs or buy household items and appliances which enhance your home’s living experience. However, don’t confuse this with luxury items such as a hot tub or a swimming pool.

If this program doesn’t work for you, try the US Department of Agriculture. Section 504 of the USDA offers a home repair program to help low-income earners in society, most of whom are found in rural areas.  Apart from home repairs, this program allows for modernization as well. If you’re 62 years old or older, you can qualify for a grant.

4.      Home Equity Loan or Home Equity Line of Credit (HELOC)

A home equity loan is a form of secured personal loan which allows you to put up your home as collateral. In return, you can borrow from 80 to 90 percent of the home’s value. This is excluding any debts you may have on the house. Since this is a secured loan, chances are you may qualify for large amounts and at lower rates compared to an unsecured loan.

On the other hand, you have a home equity line of credit often referred to as a HELOC. HELOCs allow you to tap into your home’s value when and as you need the funds. This will be in the form of credit capped at 80 to 90 percent of the home’s value after deducting other debts you may have against it.

Remember, your home acts as collateral in both options. Therefore, it’s in your best interest to repay the loan on time; otherwise, you risk foreclosure.

5.      Unsecured Personal Loan


Often, you can get anything from $2,000 to $100,000 in cash loans for bad credit. You’ll need to repay this amount in fixed monthly installments, which includes fees and interest. In most cases, a personal loan will take one to five years to repay at APRs between 4 and 36 percent.

If you have a stable income, a low debt-to-load compared to your monthly income, and good or stellar credit, then a personal loan ranks as one of the best options to pay for home repairs. The best part about a personal loan is the quick disbursement. You can get the funds as fast as the next business day. However, if you fail to meet the above conditions, you’ll have a hard time finding low rates or getting large amounts.

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6.      Disaster Relief

As the name suggests, this kind of help is only available to homeowners who’ve suffered disaster-related damages such as hurricanes or floods. The most common organizations include the Federal Emergency Management Agency and the Red Cross.

FEMA issues grants to homeowners who are in dire need of various essentials including utilities, septic systems, roofs, the home’s foundation, etc. Note that this doesn’t mean they’ll fund you to rebuild your home to what it was before the disaster.

On the other hand, The Red Cross helps in cleaning homes after disasters and may also issue grants to help in-home repairs. If you fall victim to a disaster, it’s important to apply for the grant as soon as possible. These funds last until they dry out, especially if the funds come from the taxpayers’ pockets.

7.      Cash-Out Refinancing

This option works in the same way as a home equity loan and is also one of the methods you can use to pay for home repairs. In this mode of financing, you can borrow a higher amount of money than your initial mortgage.

This means the new mortgage will replace the old one – often with more favorable terms and rates than the existing one. With cash-out refinancing, you can get up to 90% of the home’s equity. You can use the extra funds you’ll receive from the mortgage to pay for home repairs.

However, while this option extends some money to use for home repairs, it can be risky and expensive. For instance, closing costs may range from 3% to 6%. In addition, if you fail to repay the loan, you could lose the house.

Final Thoughts

Emergency home repairs can be stressful, especially if you’re low on finances. However, this doesn’t mean you have to put up with a leaking roof or other serious issues. There are various options available as listed in this article to pay for the repairs. While searching for a way to fund your home repairs, it’s important to keep your financial situation in mind.

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