The costs of maintenance and repairs will always be a necessary part of homeownership. It’s often better to tackle them early rather than risk the problem worsening later.
However, if your savings aren’t up to the job, it might be time to seek other ways of getting your home in shape—like directly tapping into its value.
If you learn how to use home equity to make repairs, you can leverage the house to get repairs done right the first time.
In this article, we’ll explain how to use home equity to make home repairs and explore various financing options to help you manage repairs effectively and affordably.
Common major home repairs and their costs
Major home repairs are expensive because they typically involve structural elements or key systems within a home.
The following are some of the most common and costly repairs that homeowners face.
Roof replacement
Roofs don’t last forever—asphalt shingle has a lifespan of 20-25 years, while materials like metal or tile can last much longer. But over time, weather and wear take their toll.
New roof costs generally range from $15,159 to $27,580, and the average usually works out to around $21,054. Of course, costs are going to vary greatly depending on several factors, namely the roof’s size and what kind of materials you want to use.
Ignoring damage on your roof can lead to more significant problems, such as:
- Water damage
- Mold growth
- Structural deterioration
Water infiltration from a leaking roof can compromise ceilings, walls, insulation, and even the foundation.
The costs of repairing these additional issues can far exceed the price of timely roof replacement.
HVAC system replacement
Heating, ventilation, and air conditioning (HVAC) systems are essential for maintaining comfortable indoor temperatures.
A typical HVAC system lasts around 10-15 years, after which it may need to be replaced. Some estimates have HVAC system replacement costs averaging between $5,000 and $10,000.
Failing to replace an aging or malfunctioning HVAC system can lead to rising energy bills due to inefficiency, reduced indoor air quality, and an uncomfortable living environment.
Worse, complete system failure during extreme weather can pose serious health risks to inhabitants, especially vulnerable groups like children and the elderly.
Foundation repairs
Cracks in the foundation of a home are a serious issue that, if not addressed, can lead to structural instability.
Foundation repair costs vary depending on the severity of the problem. Small cracks may be resolved for a few hundred dollars, but more extensive foundation repairs can range from $5,000 to $15,000, with complex issues costing even more.
Leaving foundation issues untreated can cause walls to crack, doors to jam, and floors to warp. Over time, this can lead to structural instability, significantly reducing the home’s safety and value.
Plumbing repairs
Plumbing systems are another crucial component of a well-functioning home.
Pipes, water heaters, and drainage systems all age, and over time, they may develop leaks, clogs, or worse.
Replacing old or damaged plumbing can cost anywhere from $1,000 for minor repairs to upwards of $5,000 for more extensive work, especially if it requires breaking through walls or floors.
Ignoring plumbing issues can lead to leaks that damage floors, ceilings, and walls.
Persistent water damage from unnoticed leaks often results in mold, which can have health implications and be expensive to remediate.
How a HELOC can help pay for home repairs
Home equity is the part of your home that you actually own. It’s calculated by taking the difference between what your home is worth now and how much you still owe on your mortgage.
As you pay off more of your mortgage or if your home goes up in value, your equity grows, and it becomes a valuable financial asset for you.
A home equity line of credit—a HELOC—can be used to finance major expenses, including home repairs.
Why a HELOC is ideal for home repairs
There are several reasons why a HELOC is well-suited for covering major home repairs.
Flexible access to funds
With a HELOC, you don’t have to borrow all the money at once. Instead, you can withdraw funds as repairs become necessary.
This flexibility is especially useful for repairs that may be spread out over time, such as dealing with roofing issues now and plumbing problems later.
Lower interest rates
The lower interest rates of HELOCs are another benefit, especially compared to other financing options, such as personal loans or credit cards.
Because the loan is secured by the home, lenders have the ability to offer more competitive rates, saving you money in the long run.
Interest-only payment option
Many HELOCs give borrowers the option to make interest-only payments during the initial period—the ‘draw period’—which is typically the first 10 years.
This can make it easier to manage the costs of repairs as you are only paying for the interest on the amount you’ve borrowed, giving you time to budget for principal payments later.
Tax deductibility
Under the right circumstances, interest paid on your HELOC can be tax-deductible if the funds are used for home improvements or repairs.
While it’s important to consult with a tax professional about your specific situation, this can provide an additional financial benefit.
Preserving emergency savings
Rather than depleting your emergency savings or liquidating investments to pay for home repairs, a HELOC allows you to leverage your home’s equity without drastically impacting your financial safety net.
This is especially useful when dealing with large, unplanned repairs like foundation or electrical work.
How to use home equity for home repairs
Maintaining a home comes with inevitable repair costs, many of which can be substantial.
Whether it’s replacing a roof, upgrading an HVAC system, or fixing a cracked foundation, timely repairs are essential to preserving the safety, comfort, and value of your home.
By tapping into a HELOC, homeowners can access the funds they need to cover these repairs in a cost-effective and flexible way, helping them protect their largest investment without draining their savings.
Get the money you want, made easy.
Access cash from your investment with HomeEQ. Our straightforward digital HELOC application can qualify you in minutes.
Decide if a HELOC is the right option for you, and receive your funding directly in days.