Homeownership comes with its joys, but it also entails responsibilities, such as the inevitable need for repairs and maintenance. After all, certain parts of your home — like your roof, appliances or even your HVAC or sewer lines — aren’t designed to last forever. And if you avoid the basic maintenance for these types of things, the issues can compound, as can the price to repair or replace them.

But in an uncertain economy, managing unexpected home repair expenses can be challenging. And, the cost of home repairs has been rising across the board due, in large part, to issues with stubborn inflation, so finding a way to pay for a new roof or the replacement of a heating or cooling system can be even more difficult right now. 

Luckily, you don’t necessarily need to have the cash on hand to repair your home when issues arise. There are a few financial tools you can use instead to help navigate these uncertainties and ensure your homes remain in good condition. But some may be more viable than others in an uncertain economy and the options listed below are some of the best in today’s unusual economic landscape.

Ready to start on your repairs? Find your top home equity loan options here.

4 tips for managing home repair expenses in an uncertain economy

If you’re trying to pay for an unexpected home repair in today’s economic climate, the following options could be worth considering:

Use a home equity loan to finance the repairs

Home equity loans are a popular option for homeowners looking to finance major home repairs. These types of loans 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. Home equity loans can be a great option because they typically offer fixed interest rates and fixed monthly payments, providing stability in uncertain economic climates.

One significant advantage of a home equity loan is the potential tax deductibility of the interest paid, making it a cost-effective option for eligible homeowners. However, it’s crucial to remember that failure to repay a home equity loan can result in the loss of your home through foreclosure. So, taking time for careful consideration and having a realistic repayment plan is essential before opting for this financing method.

Compare your home equity lender options online now.

Consider a home equity line of credit

Home equity lines of credit (HELOCs) are another valuable tool for financing home repairs. Similar to home equity loans, HELOCs leverage the equity in your home. However, unlike a traditional loan, a HELOC operates more like a revolving line of credit, allowing homeowners to borrow and repay funds as needed. This flexibility can be advantageous, especially when facing uncertain economic conditions and unpredictable repair costs.

That said, HELOCs typically come with variable interest rates, which means that monthly payments can fluctuate. While this can be a drawback in times of rising interest rates, it can also be an advantage when rates are on the decline. And, like home equity loans, the interest paid on a HELOC may be tax-deductible for eligible homeowners. As with any financial tool, though, responsible use and a clear repayment strategy are crucial to avoid the potential pitfalls.

Finance repairs with a personal loan or credit card

In situations where home equity options are not feasible, personal loans and credit cards can serve as alternative financing methods for smaller repairs. While these options often come with higher interest rates compared to home equity loans or HELOCs, they can provide quick access to funds without relying on the equity in the home. And personal loans, in particular, may have fixed interest rates and predictable monthly payments, providing some stability.

It’s worth noting, though, that the difference between the home equity loan and credit card interest rates can be significant — with credit card rates averaging above 20% currently. Average personal loan rates aren’t as high but are still typically higher than what you’d get with a home equity loan because they’re unsecured. So if you’re considering personal loans or credit cards, it’s essential to shop around for the best terms and interest rates. Responsible use is also paramount to avoid accumulating excessive debt. 

Explore government assistance options

In uncertain economic times, it may also be worth looking into government assistance programs that are intended to support homeowners facing financial challenges. These programs may provide grants, low-interest loans or other forms of financial aid to help with home repairs. Researching and staying informed about such initiatives at the local, state or federal levels can open up additional avenues for homeowners in need.

Some government programs are specifically designed for low-income households, while others may target certain types of repairs or energy-efficient upgrades. While these programs might not cover the entire cost of repairs, they can significantly alleviate the financial burden, making them a valuable resource for homeowners.

The bottom line

In an uncertain economy, homeowners should be proactive in managing home repair expenses. Exploring home equity loans, HELOCs, government assistance programs and considering personal loans or credit cards are all viable options. Each financial tool has its pros and cons, and the right choice for you depends on your circumstances and preferences. But by carefully evaluating these options and planning ahead, you may be better prepared to navigate the challenges of home repairs with financial stability and peace of mind.