Why You NEED an Emergency Fund
Even in a brand new home, unforeseen issues can come up that cost a considerable sum of money to repair. It’s an unfortunate truth of everyday life, but luckily, there are measures we can take to avoid being caught off guard. While having an emergency house fund won’t prevent unfortunate incidents from occurring, it will, at the very least, help ease your worries about the financial aspect of housing emergencies.
A housing emergency can strike in many ways. For example, an old tree may fall and damage your home’s window or roof. Maybe a pipe bursts and floods part of the lower level of your home, or the air conditioning unit stops working in the middle of the hot summer. Each of these incidents are irritating, but fixable, and having an emergency fund set aside will help the process of repairing the issue run much more smoothly.
Experts recommend that when you’re deciding on the sum to store away for emergencies, a safe bet is to take between 1% and 3% of your home’s value and save that amount in case of an emergency. If you’re living in a $1 million home, you’re looking at an emergency fund totaling between $10,000 and $30,000. While it seems like a hefty sum, you’ll be grateful that you thought ahead should you ever be in sudden need of repairs to your home.
Having your own emergency fund set up can be quite a benefit if you consider the fact that without spare money available, many homeowners take out personal loans or home equity lines of credit that carry with them an interest rate. If you have your own funds, you don’t have to worry about paying back more than you borrowed, and repairs can begin right away.
Because of your preparedness, you have the ability to fix the issue that arose within your home and get back to a normal life. No one wants to be hung up facing an emergency. It’s stressful, and the longer you wait, the more disastrous the consequence could be. You owe it to yourself to protect your home as early as possible, because we cannot predict the future. The wisest thing any homeowner can do is be prepared to deal with any oncoming issue as quickly and completely as possible.
Let my team at Keystone Realtors® meet all your real estate needs. I have over 16 years of experience in buying and selling in the Santa Clara and San Mateo County areas, specializing in the high-end, luxury market. Visit our website at https://www.paulphangureh.com/for listings and information. You can contact me at 650-924-2544, or email at [email protected]