What to Do When You Can’t Afford Home Repairs and Need Help

When old windows, a roof, or a heater break down, making repairs can suddenly become your top priority. But getting the money to fix your home can sometimes be difficult. Fortunately, there are options to help make your house a safe, functioning sanctuary even when you can’t afford home repairs.

In this post, you’ll discover 10 ways to ease the cost of home repairs. We’ve consulted with experienced experts, including:

Tyler Tapley, a top real estate agent who works with over 71% more single-family homes than the average agent in the Memphis, Tennessee, area.
Paula Bush, the executive director for the North West Housing Partnership located in Schaumburg, Illinois.

Their insights, along with our extensive research, will provide you with some of the best resources available to finance your repairs and, in some cases, even suggest free or lower-cost solutions to get your to-do list done.

DISCLAIMER: This article is meant for educational purposes only and is not intended to be construed as financial, tax, or legal advice. Aid programs, loans, or grants can change without notice. HomeLight always encourages you to reach out to an advisor regarding your own situation.

1. Apply for a home equity line of credit (HELOC)

Applying for a home equity line of credit (HELOC) can be one way to get the money you need for larger repairs.

“We’ve definitely seen where sellers had burst water heaters and gone in and fully remodeled the house, and spent $50,000 in repairs, but have gotten over $100,000 in equity from upgrades and new finishes,” Tapley says.

Usually, a HELOC has a variable rate that functions as a second mortgage. Your home’s equity serves as collateral for the line of credit. Lenders determine if you qualify based on your home’s equity, your income, and your credit score, which ideally should be above 620. Typically, you will need at least 15% of equity, a reliable income, and a solid payment history for all your debts, including your mortgage, although requirements will vary by lender and other aspects of your application (like how much you’re borrowing and your existing debt obligations).

Many HELOCs offer a maximum amount that can be used, paid down, and then used again up to that limit, similar to a credit card. The amount of time you can access your funds is usually 10 years, with an additional 20 years to pay off the balance. The application process typically involves the verification of income, credit, and a home appraisal, which is completed before the credit line is approved. There may be more documentation needed based on your situation as the application progresses.

2. Use a cash-out refinance to unlock money for repairs

Using a cash-out refinance option means you are refinancing your original mortgage for more than you owe in order to get extra cash back to do repairs. Homeowners who may have a higher current interest rate often find refinancing a good alternative. Lowering your interest rate can offset the additional cash you receive.

The process for a cash-out refinance is similar to other types of refinancing, including an appraisal, reviewing credit scores, and verifying income. The term of your refinance can vary from 10 to 30 years and can either be a variable- or fixed-interest rate.

3. Apply for a home repair loan

Applying for a home repair loan is typically done through a bank or credit union and doesn’t usually require the loan be secured by your home. Instead, most home repair loans will be based on your available income and credit score. These loans generally also have a shorter repayment period of less than 10 years.

This can be a good option if you don’t have enough equity available to apply for a HELOC or a cash-out refinance. Also, if you’re looking to make smaller repairs that wouldn’t be as expensive, this can be a good option for having the time to pay them off.