My House is Falling Apart and I Can’t Afford to Fix It

Owning a home comes with a hefty price tag when it comes to repairs and upkeep. The general rule of thumb is to set aside 1-4% of your homes value for home maintenance each year. But what if you don’t have thousands of dollars to set aside and you’re drowning in home repairs right now?  Read on to see what you can do if it feels like your house is falling apart around you and you can’t afford to fix it.

I Can’t Afford to Fix My House — What Can I Do?

The homeowner is holding her empty pocket with a house that sits on top of coins in the background. 

When it comes to repairing a home that’s in bad shape it’s important to know all your options whether that involves repairing a little at a time, borrowing money to make repairs, or selling your house as-is and moving on all together.

Cost of Repairs

First you need to determine if you can afford to make repairs one at a time. Here is a list of major repairs and what you might expect to pay for them:

HVAC Repairs – $100-$1,100

Water Heater Repairs- $100-$1,400

Electric Replacements- $125-$3,000

Driveway Repairs- $300-$4,500

Roof Repairs- $150-$5,000

Deck Repairs- $250-$5,000

Mold Removal- $400-$6,000

Foundation Repairs- $500-$12,000

Siding Repairs- $100-$16,000

While making a driveway repair or siding repair could be more cosmetic and for curb appeal, other repairs such as HVAC and water heaters make a big difference in how you enjoy living in your home! Other repairs involve safety and should be top priority, such as deck repairs, mold issues, foundation and electric. Finally, some repairs, such as the roof, will only get worse and cost more if they are neglected and not fixed when the issue is spotted.

Home Equity Loan

Home Equity loan application form

If paying for any of those repairs is far out of your budget and means then you can look into applying for a home equity loan.

A home equity investment loan is also called a shared appreciation agreement or shared equity agreement. These types of loans or agreements include working with an investor or investment company to cash out the equity in your home in exchange for a minor ownership stake in your home.

This agreement works similar to a loan but with one major difference: There is no monthly loan payment. At the conclusion of the agreement time period agreed upon by you and the investor (usually 10-30 years if you’re working with a national investor group, as little as 3 years if you’re working with a local investing company), you pay back the investor both the equity advance you received and a percentage of the appreciation of your home value.

These types of loans are a great solution for home owners who have a lot of home equity, but due to life circumstances they have bad credit (usually no lower than 630) and need to free up cash, usually in order to take care of debts and improve their finances and credit standing.

Also, if the home owner is at the qualifying age, they may qualify for a reverse mortgage.

Insurance or Government Assistance

Are the big repairs as a result of nature or a natural disaster? If it’s a wind storm that’s ruined your roof or a rainstorm that’s caused flooding damage then it’s worth your time to see if you have home owners or other insurance that covers these types of damage.

Likewise there are some programs under the Federal Emergency Management Agency (FEMA) that can potentially provide funds if your home was damaged due to natural disaster. If you feel your home falls in this category then look into your options with the U.S. Department of Housing and Urban Development.

Often times larger cities will have money from programs they created to combat homes falling into disrepair in certain neighborhoods. The city agency will, for example, replace a furnace or install new windows in a house and get paid back when the ownership of the house changes. Many cities also have programs to help with home repairs for the elderly regardless of where the house is.

Cash-out Refinance

If you’re hurting for cash to make the necessary repairs then look into a cash-out refinance. With this type of refinance you apply for a new mortgage that is worth more than what you currently owe on the home. The extra money is paid to you in cash to be put towards the repairs on your home. So if you owe $150,000 on your home you could apply for a new loan that would cover the cost of your repairs, say, $170,000. You would have $20,000 in cash to put towards your house and a new mortgage of $170,000 to pay down.

Depending on your financial situation you may or may not be approved for a cash-out refinance and keep in mind that you are borrowing money and that will increase your monthly mortgage payment.

Sell the House As-Is

If you are strapped for cash and unable to borrow money or refinance and the repairs are just too great then your best option would be to sell your home as-is when your house is falling apart.

Make sure you are up front about the issues with the home, even the things that aren’t noticeable right away but will surely show up later in the process during a home inspection or appraisal.

Selling a home with a lot of major repairs isn’t going to attract a traditional buyer so look into working with investors who purchase homes in poor condition with the aim of repairing them and putting them back on the market.

Working with a House Buying Company

Homeowner working with a house buying company

Expensive home repairs can sneak up on a homeowner. If you’ve inherited the home, live in an older home or haven’t been able to stay on top of repairs due to financial struggle, then the cost might be more than you can afford. So what are you to do if you can’t afford to fix them but you can’t safely and comfortably stay in your home with these unresolved issues?

If you don’t have the capital to fix the problems yourself before listing the home you would want to consider a house buying company so you don’t have to sell the house for a loss. Companies that purchase houses in as-is condition are used to dealing with repairs, big and small, and can give you a fair offer on your home.

If you decide to sell your home with damage, reach out to a us. We are a non-traditional buyer and your top rated, local Utah house buying company! We will buy your house in any condition, saving you the fuss of making the home repairs yourself, while trusting you’ll get an honest and stress-free cash offer on your home.

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