When shopping for a new home, you are faced with a wide range of decisions you likely have never given much thought to before. One such decision you’ll have to make is whether you’ll get a home warranty.
Home warranties are service contracts that can help you out if a major appliance like your air conditioner, stove or plumbing breaks down. They are different than homeowners insurance, though the two concepts are easily confused, Money Talks News pointed out.
The difference is that home warranties will arrange for someone to come to your home to fix the issue, while homeowners insurance will cover the financial loss if your home or the things inside it are stolen or damaged due to fire or other causes.
“Home warranties are service contracts in the event that a major appliance breaks down.”
Some first time home buyers may choose to cut closing costs by forgoing a home warranty, but this isn’t always the wisest decision. Business Insider noted that purchasing a home without a warranty means you will be completely responsible for anything that could go wrong with your home after you purchase it.
Weighing the costs
If you wind up having to replace a major appliance, it can get expensive very quickly. Angie’s List reported on the cost of some of the most essential appliances you may have in your home.
Repairs to a washing machine will typically cost more than $140, depending on the problem. A front-loading one may cost as much as $1,000.
Refrigerator repairs will cost more than $100, and sometimes creep into the $300 range. A new one may cost you between $900 and $8,000.
Air conditioners are another appliance that can get pricey if they begin to break down. Mashable relayed the story of Barbara Green, a homeowner in North Carolina, whose air conditioner stopped working one summer.
“It would have been over $1,000 to repair,” She recalled. “Thankfully it was covered [by the warranty], and it was repaired that day. Over the summer, the home warranty company ended up basically rebuilding my A/C piece by piece — there was no way I could have paid for all those repairs myself, and there was no way I could have survived that hot summer, so I was eternally grateful for having a home warranty.”
Home warranties done right
Of course, there are times when a home warranty isn’t in a homeowner’s best interest. All appliances have an expected lifespan, and if an appliance is still young, it may not need servicing at all for a few years. Find out how old the appliances in the home you’re looking at are. If they are near the end of their life expectancy, consider putting them on a home warranty.
For more information about what you can expect in your home buying process, talk to the experts at Lenox/WesLend Financial or call 844-225-3669. As heard on the radio, it’s the biggest no-brainer in the history of mankind.