Helpful Mortgage And Real Estate Advice

What Are “Home Warranties”, And Should I Consider Them?

By on January 15, 2014 in Home Buying Advice, Mortgage Videos

A newly purchased home has been appraised and inspected several times over, making it free from any major problems. This bill-of-health is perfect for homebuyers that have invested substantial savings into a home, but it is still critical to consider a home warranty. This type of insurance covers specific amenities in the home, such as the dishwasher, to prevent any large repair charges from occurring. Each home warranty policy differs, making it crucial for you to pick the right one for your property.

Coverage Time Period

Most home warranties last for one year. You can pay the premiums monthly or in one lump sum. For a brand new mortgage, the home warranty may have been financed within the monthly loan payment, making it easy to keep up with the premiums. You typically have the option of renewing the warranty as year-end approaches, assuming that none of the home’s amenities are in dire need of repair. In essence, they should be in good working order to renew the warranty. Some homeowners continue to renew the home warranty policy for several years, just to ensure that they are covered for any unexpected repairs.

Saving Critical Amenities

Unlike renting an apartment or house, it is up to you to repair or replace a broken home system, or appliance, in your own home. This simple idea adds up to a lot of money without home warranty coverage. If you moved into your new home three months ago, for example, and the air conditioning malfunctions, it needs repair as soon as possible. It turns out that the outside unit needs to be replaced. For these particular home systems, the outside unit can be several thousand dollars, depending on the home’s size. Even small appliances can be expensive, so home warranties even cover other amenities, such as ceiling fans, laundry centers and dishwashers. Read over the warranty to verify that it covers everything you need for a protected household.

Why Home Warranties Are A Great Choice For You

Many new homeowners confuse homeowner’s insurance and home warranties. The insurance covers the home in cases of disaster or accidents, not normal wear and tear. Home warranties prevent you from paying for an expensive repair when you are still trying to recover from paying down payments and closing costs. They are truly financial protectors when homeowners are just starting out with their new property.

Consider a home warranty for your property today. The peace-of-mind is comforting as you settle into your new home.


About the Author

About the Author: Jessica Lucas is the managing editor for Mortgage Home Base, a top real estate finance blog dedicated to helping borrowers and home buyers understand the home loan process. Follow Jessica on Google +, and share your comments here. .
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