Almost 1 in 4 Homeowners Is Delaying Repairs Due to Cost. Here Are 2 Ways to Finance Repairs Affordably

When you buy a home, you run the risk of having to deal with costly repairs. And unless you have a nice amount of money in your savings account, there may come a point when you need to borrow to cover a repair that really shouldn't wait. 

A recent survey by All Star Home found that 39% of homeowners are delaying repairs due to the cost involved. But putting off repairs could mean allowing a problem with your home to get even worse, resulting in an even higher bill once you do get around to addressing the issue at hand. That's why you may want to look at ways to finance your home repairs affordably. 

Now, before we go any further, it's important to mention that right now, borrowing rates are up in general in the wake of the Federal Reserve's recent string of interest rate hikes. So you may, unfortunately, be looking at a higher interest rate on a loan today than, say, two years ago. But here are two options you may want to consider if you need to finance home repairs.

A home equity loan

A home equity loan doesn't solely need to be used to fix or improve a home. You can use your home equity loan proceeds for any purpose. But if you're faced with a costly repair, a home equity loan could be a good bet.

Home equity loan lenders don't always take on as much risk as other lenders because your home is used as collateral for the sum you borrow. This means that if you were to fall behind on your payments, your lender could, in an extreme situation, force the sale of your home to get repaid. 

Because of this minimized risk, you may find that a home equity loan is somewhat easy to qualify for as long as your credit score is decent and you have the equity in your home to tap. And you may also find that you're offered an interest rate that doesn't make you want to cry.

A personal loan

You may be hesitant to borrow against your home for fear of losing it in the event you can't repay your loan. In that case, a personal loan may be a better bet, since these loans are unsecured and allow you to borrow money for any purpose.

To be clear, falling behind on personal loan payments could cause massive damage to your credit score, making it difficult to borrow affordably until that number improves. But you may feel more comfortable going with a personal loan to address a home repair. And if your credit score is strong, you might end up snagging a pretty competitive rate on one.

You never know when delaying a home repair might leave you with a larger bill. And also, putting off an essential repair might impact your quality of life. If your air conditioning system isn't working properly, for example, you might end up spending weeks sweltering at home until the issue gets fixed. That's why it's important to explore these two affordable borrowing options for financing a home repair if you don't have the money in savings to pay for it outright.