Deciding Whether To Purchase A Home Warranty? Factors To Consider
If you're just beginning the process of purchasing a new home, you may be equal parts excited at the possibilities that await and nervous about forking over a significant chunk of change for the down payment and moving costs. The last thing you want to worry about during this time of transition is a key appliance breaking, a pipe bursting, or water seeping into your basement after a sump pump failure—but under Murphy's Law, these issues are apt to happen at the most inconvenient times. Read on for some of the factors you'll want to consider when deciding whether to add a home warranty to your purchase.
The Age of Your Home (And Its Contents)
Home warranties are often bundled into the purchase price and can protect against appliance failure, structural damage, and other issues that may arise shortly after you've moved into your new home. These warranties are designed to provide homeowners with peace of mind that they won't be faced with expensive repair bills while they're still getting settled in.
One of the primary factors to consider when deciding whether a home warranty is right for you is the age and condition of your home and appliances. If you're purchasing new construction, it's less likely that you'll run into unexpected and expensive issues; on the other hand, if your home's appliances are all nearing (or over) legal drinking age, the roof is showing signs of wear, or the property is located in an area that floods frequently, a warranty may be a good investment.
Your Post-Down Payment Budget
For many homeowners, putting down a 10- or 20-percent down payment can eat up a major chunk of change, leaving little left over for repairs and improvements during the first year of homeownership. If you're not sure you can afford some more common home expenses, from a new refrigerator or HVAC system to a roof repair, bundling a home warranty with your purchase price can give you the financial flexibility you need to start saving again in earnest.
The Reputation of the Warranty Company
Not all home warranties are created equal, and it's important to ensure that the warranty you're considering is from a company with a good reputation. Some warranties involve a direct contract with a local repair company, essentially keeping this company on retainer in the event an issue is detected. Others go through a separate company, similar to an insurance company, that will evaluate your claim and arrange for services accordingly. You may want to do some shopping around to ensure you're getting the best quality service for your purchase; alternatively, you can ask the seller to assume the cost of a home warranty as part of the home's purchase price.
For more information on purchasing a home warranty, contact a company such as America's Preferred Home Warranty.