Buying a home is an exciting experience. It’s an opportunity to transform a mere house into a comfortable, fully functioning haven for your family. Of course, it also comes with an array of responsibilities and even uncertainties at times. What happens if something goes wrong with the house right after buying it? Down payments, closing costs, moving expenses, and other considerations can place a strain on your budget. Having to deal with extensive HVAC repairs or appliance replacements is sure to add to the financial stress.
Covering Potential Problems with a Home Buyer’s Warranty
A Home Buyers Warranty can help keep unexpected expenses at bay. These plans are service contracts that provide coverage for repairing and replacing certain home systems and appliances. You can purchase a home buyer’s warranty just before closing on a property to give yourself added protection against unexpected issues. Though these warranties can bring several benefits to the table, they also have certain drawbacks.
Pros of Home Buyers’ Warranties
One of the most significant advantages of home buyers’ warranties is the financial protection they provide against unexpected expenses. When an appliance or home system breaks down, repairing or replacing it can be costly. A warranty may offset those costs to reduce your financial burden. That’s only the beginning.
- Convenience – Home buyers’ warranties give you access to an entire network of pre-screened local service providers. That makes it easier to find the repair and replacement services you need. That’s particularly helpful if you’ve recently moved to a new area.
- Predictable Costs – These plans also help you plan ahead for monthly expenses rather than dealing with unforeseen costs when they arise. They generally have fixed premiums and and other costs, so you know which expenses to expect.
- Customization – You can also choose the home buyer’s warranty that best meets your needs and budget. Different plans are available, so you can decide how much coverage you need and which systems and appliances you’d like to cover.
Those are some of the benefits you can expect from a home buyer’s warranty. If you’re purchasing an older home or one that comes with appliances, that added protection can be invaluable. It can allow you to purchase a home with confidence that you’ll be covered if something goes awry after the fact.
Cons of Home Buyers’ Warranties
Now, it’s time to consider the potential downsides of home buyers’ warranties. As is the case with all home warranties, they may provide limited coverage. These plans typically don’t cover pre-existing problems. They may not cover new appliances you bring in or have installed after the purchase, either. For those, you may need to upgrade your home warranty.
- Service Fees – You’ll need to pay service call fees when having appliances repaired or replaced. Though the actual services being provided and other costs may be covered under your warranty, the basic service fee itself is your responsibility.
- Service Provider Restrictions – Restrictions also apply to which service providers you’re allowed to work with. You’ll need to use those in the warranty provider’s network.
- Limited Component Coverage – Additionally, there may be limitations in place for appliance and system replacements. For example, if your refrigerator fails, your home buyer’s warranty may only cover a replacement that’s similar to the one you have. You probably won’t be able to use the warranty’s coverage to replace it with a more expensive, higher-end model.
On top of those factors, you’ll need to remember to renew your warranty plan each year or upgrade it if necessary. Failing to do so could result in a lapse in coverage. At the same time, routine maintenance on systems and appliances isn’t included in a home warranty. You’ll need to pay for that out of pocket.
Protecting Your New Investment with a Home Buyer’s Warranty
Whether you purchase a brand-new home with all the modern amenities or an authentic Victorian with an extensive history, there’s always a chance that something could go wrong. A home buyer’s warranty could give you a safety net for unexpected expenses. Though these plans come with both benefits and disadvantages, plenty can be said for having an extra level of protection in place.