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Is a Home Warranty Plan a Good Investment for New Homeowners?

If you are getting ready to buy a home, you are about to make what is probably the most significant investment of your life. This choice will affect you for the next few decades and beyond. It’s vital that you choose the right home at a price you can afford.

Lifebuoy floating in a flooded kitchen

Of course, with homeownership comes the constant responsibility of paying for maintenance, improvements, and repairs. If you add these costs to your monthly mortgage and insurance coverage, the financial aspect of owning a home can be overwhelming. When something breaks down, it might be during a time when your budget is tight or when you don’t have much money in your savings account.

You can take comfort, however, to know that help is available when items in your home stop working and need repairs or replacement. This is where a home warranty comes into play. This plan can work well for anyone who owns a home, but it can be ideal for new homeowners. You can understand how this coverage works and how it can benefit you.

A home warranty is different from homeowner’s insurance. This plan will cover the repairs or replacements of certain items or systems in your home that break down because of wear and tear. The warranty also works when appliances and systems unexpectedly or suddenly stop functioning correctly.

A warranty will cover appliances such as a water heater, washer, dryer, refrigerator, dishwasher, built-in microwave, and garbage disposal. It also applies to the HVAC, plumbing, and electrical systems as well as to your roof and sprinkling system. If you have a swimming pool, it will cover any repairs required to have it working properly, too.

Your home warranty is an agreement with a warranty company. When you pay the yearly or monthly premium, the company agrees to send a professional repair technician to your home to evaluate the problem. After diagnosing the issue, the technician will inform you whether repairs will be sufficient or whether a total replacement is necessary. The warranty will cover these costs up to a certain threshold. Most plans have a limit of up to $1,000 per item, though, some allow for more.

The warranty is good for one year. You may renew it when it expires. You cannot apply your warranty to repairs or a new installation if you caused the damage on purpose or if you used the item incorrectly.

You Don’t Have to Do the Repairs Yourself

A person who has lived in the same home for years may have learned a few things about fixing appliances and systems. If you are a new homeowner, though, the chances are lower that you have such skills. It can be stressful trying to figure out how to get these items up and running if you have not done so before.

A nice aspect of having a home warranty is that you can rely on an experienced professional to take care of the repairs and any installation. You don’t need to feel overwhelmed when repairs are necessary. A warranty puts this duty in the hands of a licensed technician who can correctly and quickly solve the problem.

Money May Be Tight

Young parents joining hands making roof sitting with children indoorAs a new homeowner, you may not have a lot of extra cash available for home repairs. Having recently moved into your first house, you might have used your savings as a down payment. You may also be stretched to the end of your budget making your mortgage payment. Having to come up with hundreds or even thousands to fix broken appliances could be beyond your capabilities.

A home warranty can save you a significant amount of money when appliances and systems break down. You can save your money for other household needs such as buying furniture or making other improvements.

Not Used to Making Repairs

A new homeowner who has only rented previously is likely accustomed to calling the landlord when repairs are needed. Having the responsibility of owning a home requires a shift in thought when something in the house needs maintenance. But if it comes to major repairs, it still may be difficult for such a homeowner to know where to turn and what to do.

With the benefit of a home warranty, the homeowner only needs to rely on the services of the technician that the warranty company sends. The technician will handle all aspects of the process, including the diagnosis, repair, installation, and cleanup in the house.

If you are a new homeowner, you may be feeling the pressures that come with this responsibility. Your stress can mount if an appliance or system breaks down. This is when a home warranty can come to your rescue and provide the peace of mind and help you are looking for.

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