Major Issues Homeowners Need to Be Prepared For

08 Jan

Owning a home can be very rewarding, but it can also come with some unexpected and very expensive surprises. If you are unprepared for these types of expenses, you could find yourself taking out a home equity loan or running up credit card debt to cover surprise expenses. Most financial experts recommend keeping three to six months of expenses in a savings account to help cover these types of costs when they pop up. 

Here are just a few unexpected costs that homeowners should be prepared for:

Property Taxes

While most homeowners realize they are responsible for property taxes on their new home, these taxes can end up being a huge expense and if you are unprepared you may find yourself in financial hot water. Business Insider data shows that property taxes can run from $560 a year in Arkansas up to $7,800 a year in New Jersey

If your property taxes are not rolled into your mortgage payment make sure you save up the money over the year. The best way to do this is to put one twelfth of your property taxes in a savings account each month so you have the money saved up at the end of the year. 

HVAC Problems

Your heating and air conditioning system is one of the most expensive components of your home and if it goes on the fritz it can be a very expensive repair or replacement. In general, a HVAC system is good for roughly 15 years, after that you are heating your home on borrowed time. 

Many newer homes have two HVAC systems which can double the pain as they will most likely need to be replaced at roughly the same time. According to industry data, the average cost to replace a furnace is $4,500 while a central AC until can set you back $3,800. 

If you cannot easily afford this type of expense you may have to dip into your emergency savings to cover this cost. 

Roof Issues

Another expensive issue that can crop up is roof problems. The roof of your home can be damaged by hail, wind, ice, snow and even high temperatures. Repairing or replacing a roof can be very expensive and if you are unprepared you could end up having to take out a loan to cover those costs. 

While a roof is covered by your homeowners insurance, it may come with a significant deductible. Many insurers have gone to a percentage deductible when it comes to roof damage which means that you will pay a percentage of your total coverage as a deductible. As an example, if you are carrying $300,000 in coverage on your home and have a 5 percent roof deductible you will be on the hook for $15,000 before your policy kicks in to cover the balance. 

Job Loss

No one expects to lose their job or get injured but if you find yourself out of work it can have a major impact on your finances. Monthly bills don’t stop coming just because you are out of work so having three to six months of expenses saved away can be a financial lifesaver. 

Without a financial backup you could end up losing your home or having to dig into your retirement assets to help cover your monthly bills. 

Security Systems

If you have just moved into a new home, one of the first things you may want to do is install a security system. This can provide peace of mind while also keeping your family safe. However, security systems can be expensive often coming in at over $1,000 for a monitored system. This doesn’t include the monthly fee that can range from $20 to $60 a month. 

There are a number of systems on the market that you can install yourself but expect to pay at least $800 on the low end and up to $2,500 on the high end. 

Foundation Problems

If it turns out that your home has, or develops foundation issues, the cost to repair it can be astronomical. The foundation of your home can develop problems over the years if it was laid down incorrectly, was built on unstable soil or if you have had a major water leak. 

The cost to repair a foundation issue can run from $1,000 to well over $30,000 for major problems that require walls and floors to be repaired. If you don’t have any savings to help cover these types of costs you could find yourself in financial trouble. 

Landscaping Costs

Many new homeowners underestimate the cost to landscape their properties and maintain that landscaping. If you recently purchased a new home, you may have to cover the cost of new landscaping yourself. This can be extremely expensive, especially if you have to install a sprinkler system as well. 

Even if your new home is already landscaped, you will need to purchase a lawn mower as well as other lawn maintenance equipment. Over time you may need to have trees trimmed or removed and those costs can quickly add up. 

Pest Damage

Bugs and other pests can do serious damage to your home and you can be on the hook to repair the damage if your insurance company feels you could have prevented the problem through routine maintenance. 

Termites, racoons and even birds can cause major damage to your home and the repair bills can be shockingly high. Repairing significant termite damage can easily run up to $10,000 or more and many insurance policies exclude termite damage which means you will be responsible for the repair costs. 


If your home is hit by burglars your insurance policy should step up to help you cover your losses, but you will need to pay your deductible first. Depending on what you set your deductible at, you could be covering $1,000 to $5,000 in bills. In addition, after you have made a claim you can expect your insurance rates to be headed up so you will also have to cover a higher monthly rate. 

All of these scenarios are real and can happen to anyone. Protect your home and finances by having at least three months and preferably, six months of expenses in a savings account to ensure you can cover these types of surprise bills. 

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