How To Know If You Should Get a Home Warranty Plan

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How To Know If You Should Get a Home Warranty Plan
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Here are a few ways to know whether or not you should get a home warranty plan.

Whether you’re moving into a new home or have been in your current home for a while, purchasing a home warranty plan may be extremely beneficial to you. Similar to when you purchase a home, there are many factors to consider when purchasing a home warranty plan. Make sure you understand your needs and budget first, and only purchase a warranty plan from the best home warranty companies available to you in your area.

If you’re on the fence about purchasing a plan, here are a few ways to know whether or not making the buy is a good decision.

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1. Things break constantly

If things seem to break frequently, purchasing a home warranty plan may be a good idea. The cost and convenience of a home warranty plan may make repairs less of a burden, as repairs can cost a lot of money and contractors can be difficult to deal with.

2. You live in an older home

Older homes tend to have older appliances and systems throughout the home. With older appliances and systems, the closer they are to the end of their lifespan, thus requiring maintenance to keep them running. Having a home warranty for repair coverage in an older home can be worth it as you may need to replace appliances or systems within the home.

3. You don’t have a lot of money saved up

If you’re a new homeowner, chances are you don’t have a lot of extra money to spend. Having a home warranty costs less in the short term, especially if you have a lot of repairs that need to be made. Some expenses, such as replacing a water heater, can easily cost you $1,000. To avoid this, purchasing a home warranty plan can help.

4. You’re selling your home

If you’re selling your home, you may want to purchase a home warranty plan. While you may not get the benefit from it, the new homeowners will. Purchasing a home warranty plan is a great incentive for someone to purchase your home, and for the amount you’re selling your house for, it’s a worthy investment.

5. It’s timely

Based on the time of year and location, your appliances and systems may be prone to breaking. Some appliances (such as refrigerators) work overtime due to the heat, thus causing a spike in repairs in months like July. Other times, such as winter, can cause appliances to not heat enough or even freeze. If you live in an area with extreme temperatures, you may want to consider purchasing a home warranty plan around these times depending on the functionality of your appliances and systems.

Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)www.valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver
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