Buying a new home is a big move, in more ways than one. So, while you are house hunting for your next home, are you also considering how you will protect your next investment? A home warranty could be just the ticket. If you aren’t sure what a home warranty is or how it will help you then keep reading because we are about to dive into the details.
WHAT IS A HOME WARRANTY?
At some point in your adult life you have probably heard the term “home warranty,” but do you actually know what that means? When specific home systems and/or appliances break down, a home warranty can help cover repair or replacement costs when normal wear and tear takes its toll. Home warranty coverage can include your:
- HVAC system
- plumbing
- electrical
- kitchen appliances
WHY DO YOU NEED A HOME WARRANTY?
There are several benefits to getting a home warranty, one of which is peace of mind. If you have owned a home before, you may be familiar with common home repairs that can crop up without notice and how those unexpected expenses can be vexing. By covering the costs of any repairs or necessary replacements, a home warranty can help provide some reassurance that you’ll be able to manage any surprise costs.
Plus, a home warranty might save you money down the road. It can feel financially overwhelming to fix a home system or crucial appliance, especially if you aren’t prepared. With a home warranty, you could minimize the costs of remedying the situation rather than having to pay for the entire cost out of pocket.
Also, a home warranty could add value to your home. Say you decide to sell your home later on; your property might look more attractive to possible buyers if you have a home warranty in place. It shows you’ve taken good care of the property and that you’re willing to stand behind the quality of your home.
HOW MUCH DO HOME WARRANTIES COST?
If you are thinking about getting a home warranty, keep in mind how the cost would affect your budget. Home warranty prices can vary depending on a variety of factors including the size of your home, the level of coverage you need, and the warranty provider you choose. Try using a mortgage calculator to see what your monthly mortgage payment would be, then add the monthly cost of a home warranty to that number to get an idea of how it can work within your financial plan.
An average basic home warranty plan can cost anywhere from $350 to $600 per year, while more comprehensive plans can range from $600 to $1,000 per year. However, additional fees may apply for service calls and there may be limits on the amount of coverage provided for each item.
Before committing to a home warranty, make sure to carefully review the terms and conditions of the contract to ensure that you fully understand what is covered and what is not. It’s also a good idea to research different warranty providers to compare pricing and find the best value for your needs.
ARE HOME WARRANTIES WORTH IT?
Whether or not getting a home warranty is “worth it” depends on each individual situation. Like any type of insurance, having a home warranty is not a guarantee that you will use it. You may never need it, or you may use it multiple times. It all depends on the age of your home and the condition of its systems and appliances.
That being said, if you’re worried about unexpected repair costs, a home warranty can be a wise investment. Just be sure to read the fine print and do your research to choose a reputable warranty company that will provide quality service.
If you have questions about how a home warranty might work with your mortgage, contact your local mortgage expert today. Happy house hunting!
