As a homeowner, it's essential to save money to prepare for emergency home repair.

Most people keep less than one thousand dollars in an emergency fund and are disappointed when an appliance breaks down or if a natural disaster occurs that isn't covered.

When homes age, there is a bigger chance of having to spend money on repairs like an air conditioner, a kitchen appliance or a water heater or other another financial emergency.

What happens if your shingles on your roof get worn or your floorboards chip or break? 

If you don't have money for house repairs, you can find yourself in an unfortunate place, especially during an unexpected disaster.

While some emergency home repair needs are predictable, other repairs come without warning. They arrive at the worst possible times when we're not prepared financially.

Here's how to prepare for these predicaments.

How to Plan Financially for An Emergency Home Repair Nightmare

Take these proactive steps to recover from expensive emergency home repairs. You'll be glad you did.

1. Know What's On Your Insurance Policy

It's important to know what's in your insurance policy. Don't assume you're covered for all emergency repairs.

If your home is older, insurance companies in some states like Florida are not responsible to cover you for things like busted pipes, plumbing repairs or water damage.

Check with your insurance policy and your agent. You can often purchase additional insurance that will cover the damage. A leak or water damage can cost in the thousands of dollars with mold damage, inspections, and renovation.

Don't select the cheapest insurance plans. If you have a claim after a home emergency, you might regret it when a plan that costs a couple of hundred dollars more a year can save you a lot of money and time.

2. Check Disaster Relief Options Early

While many emergency home repair costs result from an aging home, others occur from natural disasters. Especially if you live in an area that has earthquakes, flooding, and hurricanes.

With natural disasters follow the need for emergency home repairs at least once during the time you own your home. Look into programs that offer assistance for these kinds of repairs.

Organizations such as the Red Cross and FEMA can provide emergency funds in the case of a natural disaster.

While they won't give you money to plan for a disaster, they could provide funding for major repairs in the event of a disaster.

Check with them to learn what emergency repair services like plumbing repair they can cover. And what they don't.

3. Refinancing and Home Repair Programs May Help

Loan Refinancing help exists through Limited 203k programs and FHA 203k government programs.

They can assist you with paying for home repairs for your property. You can get additional funding to make your home more livable.

Loan programs for specific populations such as senior citizens and low-income homeowners can help fund emergency repairs.

Low-income homeowners may qualify for the section 504 home repair program. A number of programs exist for senior citizens.

4. Consider A Credit Card for Emergency Funds

If you're not covered through your insurance company or government program options, consider using a credit card. When you don't have the cash in your bank account, a credit card that you can pay off gradually might be a good option.

Work on building your credit now if your credit limit isn't high enough to cover emergency home repair expenses.

You can achieve this by paying utility bills on time and paying off your credit cards a little early.

5. Apply for a Home Equity Line of Credit

Using the value of your home to fund emergency repair can provide more flexibility and offer better interest rates. By backing a loan with your home, you can pay less for a loan.

If you go this route, make sure to pay it off on time as negligent payments can result in the loss of your home. It's smart to limit the funds from a home equity line of credit to repair costs.

6. Consider Borrowing Money From Your 401k 

Do you have a 401k from your employer? If you're low on funds and have little in your savings, this can be another option.

Check out the pros and cons.

While the money in your 401k account is flexible it can be tricky. You may have to jump through some hoops to access the money.

What makes this option confusing are tax concerns when taking the money out. It can appear that rather than coming out as a direct payment, transferring money from your 401k acts as a loan.

It's not the best way to borrow money. However, if you're broke, you can tap into it for housing repairs.

7. Reach Out to Non-Profit Organizations

If you’re in dire straits, a non-profit can assist you with your emergency home repair. But at times it can be difficult and be a lengthy process. You may need to provide an abundance of paperwork to get assistance.

While it might be tough to secure funds to replace your HVAC system, it's easier to obtain funding for structural issues that have been damaged.

Organizations that can offer help include Christian charities and Habit for Humanity which use volunteers to help repair and rebuild homes in the community that need assistance.

The Final Takeaway on Obtaining Emergency Home Repair Funding

Now you are familiar with seven funding options for emergency home repair. As you can see each one has its benefits and its particular challenges.

But knowing what types of funding are available to you is the first step in choosing how to best plan for your specific financial protection.

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