There’s nothing better than owning your own home. If you are a homeowner, though, you know that large expenditures pop up from time to time and that they can’t always be put off. This may be the case if you find a leak in your ceiling. If water is leaking into your home, you won’t have time to waste—a (potentially large) repair cost is imminent. Here are some things you can do right away if you find a leak in your ceiling, along with some information on how to pay for any major work that might be needed, such as using a refinance to cover the home repair.
If you spot a leak in your ceiling, damage control should be your number one priority. This is true even if you can’t currently see any water. If you see other signs of a leak, such as bubbling paint, the wall swelling outward, or visible brown rings in your paint or ceiling material, you’ll need to take the same steps.
You should immediately move any furniture or valuables away from the leak. If something can’t be moved easily (like an oven or other large appliance), you can drape it with a tarp or even a few plastic garbage bags. The idea is to minimize the damage as much as possible.
Next, you’ll need to locate the source of the leak and hire the right person for the repair. Unless you are a contractor, this probably isn’t a problem you can fix yourself. Leaks can come from a weakened spot in your roof; old, broken, or leaky plumbing; or even a drainage issue. You’ll need to contact the appropriate professional.
Making timely repairs is key to good home upkeep. Unseen leakage in other areas can cause moisture to collect in the building materials creating a host of long-term problems like mold, mildew, or even major structural damage. Getting the help of a professional in locating and addressing the leak is a must and should be done in a timely manner.
The most likely cause of a ceiling leak is roof damage. Don’t panic. Even if water is leaking into your home, you may not need a new roof. Leaks can be caused by damaged shingles, which a reputable roofer may be able to repair without replacing the roof entirely. Leaks can also be caused by a weakening or tearing away of the flashing (the metal that connects your roof to your chimney and to the sides of the gutters). However, it’s good to keep in mind that even minor repairs can be costly. Most roofing companies charge around $550 for an emergency assessment, and that is without labor, materials, or the repair itself.
You could also find that the leak is the result of a plumbing issue. Plumbing leaks can be trickier to identify since most home plumbing is hidden behind walls and under flooring. Depending on the source of the leak and how readily identifiable it is, plumbing repairs might be more time-consuming and less straightforward than roof repairs.
Major Repairs and Replacements
It’s possible that a minor repair won’t help in the long run. If your ceiling is leaking, you may need to think about the best way to pay for a large and, likely unexpected, expense. Two of the most common tools that homeowners use to pay for home repairs are cash-out-refinancing and HELOCs. Both tap into the equity you’ve already built up in your home and turn that into cash on hand.
Cash-Out Refinance for Home Repair
When you use cash-out refinancing, you are replacing your current home loan with a new, larger loan. Then you pocket the difference.
For example, say you need $20,000 to put a new roof on your home. If your home is worth $250,000, and you still owe $100,000, that means you have $150,000 in equity. Your cash-out refinance for home repair can be used to take an extra $20,000 in cash out of your equity to pay for the roof. Your current $100,000 home loan would be replaced with one for $120,000, and you’d receive a slightly larger mortgage bill each month.
Home Equity Line of Credit (HELOC) for Home Repair
Another popular way to access your equity is to open a home equity line of credit, or HELOC. You might have heard people refer to a HELOC as a “second mortgage.” HELOCs provide a line of credit, much like a credit card, that is secured by your home. Unlike a credit card, however, a HELOC is set up to be used during a specified draw period. During the draw period, which is usually 5 or 10 years, depending on the terms, you are only required to pay the interest on your balance. After the draw period ends, you then make payments on both the principal and the interest.
While cash-out refinancing replaces your home loan with a larger one, a HELOC will leave your current mortgage unchanged. This is great if the terms of your original loan are agreeable and the current interest rate has gone up since then.
Which One Is for You?
Whether a HELOC or a cash-out refinance is the right tool for your home repair will depend, in part, on the types of repairs you need to make and how quickly you need to make them. Cash-out refinancing is a good option if you’re interested in taking advantage of a lower home loan interest rate than the one available when you signed your first mortgage. But remember, it is a refinancing of your home and an entirely new loan. This means that it takes some time and effort to arrange, usually 30 to 60 days. If you have emergency repairs that need to be made now, and a temporary fix isn’t possible in the meantime, refinancing might not be the right choice for you.
When you take out a HELOC, however, you’re likely to get access to that credit much more quickly. The disadvantage is that your interest payment will change over time. The good news about both funding options is that the interest you pay may be tax-deductible.Whatever tool you use to pay for home repairs will be a personal choice. It will be impacted by how much equity you currently have in your home, the terms of your original loan, and the interest rate at the time the repairs are needed. If you’re in Washington State, contact a Home Loan Guide at Solarity to take a look at the options for taking advantage of your home’s equity.