Fannie Mae is now offering qualified buyers 3.5% off the final sales price to be used toward closing costs or their choice of appliances. The announcement came today in the form of a press release. This incentive applies to any HomePath purchase that closes before May 1, 2010. Not sure if the home you want is a HomePath property? Just check on HomePath.com, and if it’s on the list – you would qualify for this offer.
First-time home buyers have enough to worry about, like finding the right house for the right price, coming up with a sensible down payment and securing a mortgage. After putting down a hefty sum for the purchase, many first-timers may not have the extra cash on hand for major fails like the furnace, the air conditioner or kitchen and laundry appliances; a home warranty can be a good fix. What’s a home warranty? How does it work and what does it cover? Let’s find out!
What Is a Home Warranty?
Let’s start with the basics. A home warranty is a home protection plan that helps cover any unexpected repairs. And, since many first-time buyers may not have a lot of experience maintaining a home, it’s a pretty good idea.
How Does a Home Warranty Work?
If/when something breaks down, you call your home warranty provider and make a report. They’ll get in touch with a third-party contractor with whom they have a business arrangement, and that contractor will contact you to schedule an appointment. The repair or replacement will be paid for by the warranty provider, however, you will have to pay a trade service fee that can range from $75 to $125.
What Does a Home Warranty Cover?
Each warranty and/or warranty provider is different, but typically these things are covered:
- Systems: air conditioning, heating, electrical, plumbing, water heater, garbage disposal, central vacuum
- Appliances: refrigerators, dishwashers, dryers, washers, range/oven/cooktop, built-in microwave oven, ice maker, trash compactor, garage door opener, built-in processors
How Much Does a Home Warranty Cost?
Sounds like another expense, but it can be well worth the price, which will range from about $200–$600 per year, depending on how comprehensive the policy is.
How Do I Get One?
First off, ask the seller if they are offering one as a sales incentive. If not, ask your real estate agent if he/she offers one. If they don’t offer one, you should ask for one. If they want the sale bad enough, they might spring for the first year of coverage.
You also have the option to purchase one on your own from a home warranty provider. If you’re buying a new construction home, the warranty may already be included in the sales agreement. While new construction reduces the chance that you will need the warranty, it will provide some extra peace of mind.
What Can Go Wrong?
There are a few cases where coverage for a repair or replacement can be denied. Some include
- Lack of maintenance
- Improper installation
- Code violation
- Excessive wear and tear
- Pre-existing conditions
- Appliance or system is not included in the policy
How Do I Find a Home Warranty Provider?
Check out HomeWarrantyReview.com. It lists a number of national and local companies, as well as reviews for you to compare providers.
Home Warranty = Peace of Mind
As a first-time homeowner, you’ll find the experience very rewarding, and maybe sometimes a little scary. A home warranty can ease your mind when it comes to impending expensive home repairs.
Do you have a home warranty? Do you think it’s worth the cost of the policy? Which company provides your policy? Are you satisfied with the coverage and service? Tell us all about it in the comment section below!