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Home Warranty Question

June 6th, 2019 at 12:40 pm

When I purchased my house, my realtor recommended a home warranty. Since then, I have had several people tell me that this is not a good value for money. I also have had a few people tell me that it’s totally worth it and will pay for itself. What do you all recommend? I think it’s probably a $50-$75 cost per month. Do you all think it’s worth it? I don’t want to spend money I don’t have to, but if it will save me money in the long run, then it’s something I am open to.

5 Responses to “Home Warranty Question”

  1. jp Says:

    I guess it depends Smile (Isn't that always the case!)

    A home warranty is essentially "insurance" for appliances (kitchen appliances, water heater, heater/ac, sometimes roof(?), etc.). How likely are your appliances to break down, and do you have the funds to deal with it?

    Did you purchase your house new (did someone live in it before you or did you buy direct from builder)? If your house is new, your appliances would be new and are less likely to break down (or, most likely, have their own warranty already). Did the previous owners (or you) replace all the appliances? If they have, when? how new are they?

    Our first home, I rented for 6 years before I purchased it, so I knew what appliances had quirks, which had been replaced and which were on their way out. No need for a warranty as I generally knew everything was working properly.

    Our second home came with a home warranty. Since we weren't familiar with the appliances (they were new to us, but not new-new....we didn't know if they acted up, when they were lasted cleaned/maintained/etc.) We kept the warranty for a year. That way we had time to figure out the quality of appliances (without them all breaking on us at once). After the year, we generally knew what was going on and could plan accordingly. We never did have to use the warranty, but it was nice to have in case everything broke at once.

    Our 3rd home, we did not purchase a home warranty b/c we replaced everything when we moved in.

    My recommendation: If you have concerns that several appliances will break down in the next 12 months, keep the warranty and cancel after a year. If you think they'll hold up, cancel the warranty and save the $50 into a sinking fund for when they do crap out. They will eventually fail, that's just home ownership - have the funds ready for when they do (i.e. it's not an emergency - machines break).

  2. Amber Says:

    The home I purchased I lived in it for 7 years, as with JP I knew what the quirks were, so for me I didn’t purchase the warranty. I think even if I didn’t know, I would not have purchased.

    The month I closed I created a savings account for home repairs e.g stove, washer, leaks. I don’t have much but at least I have something. I’m anticipating, so long as there aren’t any hurricanes I won’t have any major repairs. Besides refrigerators and stoves aren’t that expensive

  3. Creditcardfree Says:

    I agree with the others. Will point out if you have an emergency fund to cover most or all the issues the warranty covers, then it is generally not needed, as you are self insured. It can be helpful the first year, but after that you should know how the home is and if everything is generally working.

  4. Wink Says:

    I have a warranty on just my HVAC and hot water heater. I have enough in my emergency fund to easily replace appliances, but if I had to replace my HVAC that would be a pretty big hit. That warranty also includes a yearly cleaning and inspection. I pay just under $28 a month for it, and I'm ok with that expense. It gives me peace of mind.

  5. fireandi Says:

    Thank you everyone. This is very helpful.

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