A Home warranty is not the same as homeowner’s insurance, which is a must-have and will be required by your lender to secure your mortgage. Home warranties cover repairs on appliances and home systems like plumbing and electrical.
A home warranty policy provides financial protection to new homeowners who may be faced with unanticipated problems after moving into their recently purchased home.
What is the difference between homeowner’s insurance and a home warranty? Homeowner’s insurance covers the physical structure as well as your personal belongings in the event of damage or loss should a fire or other major catastrophe occur. A home warranty covers your home’s systems and appliances including:
- Heating and cooling (HVAC)
- Kitchen appliances
- Washer and dryer
- Water heaters
- Additional service coverage for swimming pools, wells, and septic systems can be added
A home warranty policy typically lasts for one year and costs anywhere from $400 to $800. If you are purchasing a home that is older, or hasn’t been upgraded or recently remodeled, a home warranty can offer peace of mind and potentially significant cost savings should something malfunction after you take ownership.
Often, home warranties purchased while you’re in contract offer extra cost savings, so this is an ideal time to decide if you want such a policy. It is also something that needs to be included in the offer if you want the seller to pay for the warranty.
Now that we’ve determined all of the items to include in your offer, you’ve signed it, and it is in the hands of the sellers, let’s talk about setting up a home inspection.