4 ways to cover unexpected home repairs

Whether it happens due to weather events or simple wear and tear over time, an unanticipated repair is an unfortunate inevitability for just about any homeowner. Sometimes the repair is quick, easy and cheap, but often it is not, and can leave you with a bill just as surprising as the repair need that popped up.

Frequent issues that homeowners encounter — which include water damage, roof damage and issues with windows and doors — "come at a steep cost, with 46% of homeowners spending more than $5,000 out-of-pocket," said Courtney Klosterman, a home insights expert at Hippo, in an interview with Bankrate.

In an ideal world, you would have the cash on hand to pay the bill. But things do not always go as planned (hence the unexpected repair). In that case, there are some other ways to cover the cost so you can keep your home in good repair.

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File a homeowners insurance claim

Filing a homeowners insurance claim "should be your first line of defense against damage and destruction," said Bankrate. Figure out what your policy will cover and what you have to do to get that coverage, such as getting an assessment of the damage from a qualified inspector. Just keep in mind that with this option, you might wait up to 90 days to receive your reimbursement.

Tap home equity

If insurance is not cutting it and you have built up equity in your home, you might consider a home equity loan or home equity line of credit (HELOC). These "allow homeowners to borrow against the equity they've built up in their homes, which is the difference between the home's current market value and the outstanding mortgage balance," said CBS MoneyWatch.

With a home equity loan, you will receive a lump sum, which is then "repaid in monthly installments, typically with a fixed interest rate," said Bankrate. A HELOC is effectively an open line of credit that you can tap as needed, similarly to a credit card. While this "flexibility can be advantageous, especially when facing uncertain economic conditions and unpredictable repair costs," HELOCs "typically come with variable interest rates, which means that monthly payments can fluctuate," said CBS MoneyWatch.

With either option, since you are borrowing against your home, keep in mind that you could lose your home if you miss payments.

Explore a home improvement loan

If you do not yet have much equity in your home or do not want to use your home as collateral, another option is a home improvement loan. These are "unsecured personal loans" that often "offer same- or next-day funding and extended repayment terms if you use the funds for home improvements," said NerdWallet. However, because there is no collateral backing the loan, "rates tend to be higher than home equity options."

Tap community or government assistance

Sometimes, you simply are not in the financial position to borrow. In this case, you might look into assistance programs, which "may provide grants, low-interest loans or other forms of financial aid to help with home repairs," said CBS MoneyWatch.

These programs can target specific populations, such as senior or low-income homeowners or those with a disability, or particular types of repairs, such as those focused on energy efficiency. However, they "might not cover the entire cost of repairs," said CBS MoneyWatch.