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1 in 5 homeowners is making this costly mistake — and it could ruin their finances

Key Points
  • Close to 20% of homeowners have no money set aside for an emergency home repair, according to a survey from HomeServe USA, a provider of home repair plans.
  • The cost of fixing pipes and faucets averages around $304, according to HomeAdvisor. If you’re installing asphalt shingle roofing, the average cost is $7,280.
  • Got a costly repair? Turn to your emergency fund, which should cover 3 to 6 months of expenses
Bob Oliver | Getty Images

Here's a home improvement project nobody looks forward to: replacing a sewer line.

For homeowners, the mortgage, property taxes and insurance only account for a portion of the cost of owning an abode.

It's those surprise emergency repairs that can destroy your budget.

Indeed, 18% of homeowners polled by HomeServe USA said that they had no money set aside for surprise repairs. The company, a provider of home repair plans, conducted an online poll of 1,429 homeowners from Feb. 27 to March 1.

More than half of participants said they had a home repair emergency in the last 12 months.

"Part of that can be attributed to the fact that the median age of a home is about 40 years, so that's telling us that homes are aging," said Myles Meehan, vice president of corporate communication at HomeServe USA.

"People should be concerned about maintenance and being prepared for things to break down," he said.

Roof to foundation

Ernest Prim | Getty Images

Those repairs can run the gamut — and each one can take a chunk out of your wallet.

For instance, the national average cost of installing or replacing asphalt shingle roofing is $7,280, according to HomeAdvisor, a website that helps homeowners find contractors.

Fixing or replacing faucets, fixtures and pipes averages out to $304, HomeAdvisor found.

Failure to tackle those problems right away can lead to higher expenses.

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For instance, repairing a sewer line — the plumbing that carries waste water away from your home — runs an average cost of $2,556, according to HomeAdvisor.

Depending on the severity of the problem, you might have to hire contractors to excavate your lawn or driveway to replace the line. That cost can run anywhere from $3,000 to $25,000, HomeAdvisor found.

"I think you have to understand that things break, problems happen and, if you've owned a home for six months or longer, you know that," said David Mendels, a certified financial planner and director of planning at Creative Financial Concepts in New York.

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The best way to foot the bill for that surprise expense is to turn to your emergency fund, a pot of cash that's sufficient to cover three to six months of costs.

"If you need a new boiler, is that really different from your car breaking down?" asked Mendels. "They're all emergencies."

Some experts recommend setting aside a fund just for home-related emergencies: Sock away savings equal to 1% of the home's purchase price each year to cover ongoing maintenance, said Deborah Kearns, an analyst with Bankrate.com.

The next best option in an emergency might be to turn to a home equity line of credit, a revolving credit line that's secured by your home.

Be aware that so-called HELOCs usually have adjustable interest rates that move along with the federal funds rate.

The current average rate on a HELOC is 5.48%, according to Bankrate.com.

Borrow responsibly, and reserve the line of credit for emergencies. "I'm a fan of the HELOC if you have the discipline to not use it," said Mendels.

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