I get multiple calls weekly from clients telling me they received a letter from their lender stating they
must get a home warranty immediately. These letters are deceptive advertising at it’s worst. Shady
companies give the impression they represent the homeowner’s lender to sell their service but in reality
there is no affiliation.
What is a Home Warranty?
I first explain that a home warranty is a Voluntary form of insurance that helps cover the costs to replace
or repair major home appliances. Things like Heating/AC units, Dish Washers, Ovens, etc. You pay for a
policy and if something in your home breaks the warranty will cover a part of the cost to repair or
replace it.
Are Home Warranties required by my lender?
Absolutely not. Your lender does require standard homeowner’s insurance but home warranties are
completely optional. These advertisers are lying when they tell you that you must get a warranty to
satisfy the lender’s requirements.
Should you have a Home Warranty?
This is my personal opinion but I feel like most manufacturers intentionally design their products to
survive about 10-12 years. It seems that when something in the home breaks, it will only be a few weeks
before something else breaks.
If your home and appliances are reaching the 10-12 year mark then yes it probably would save you
hundreds if not thousands of dollars to invest in a home warranty. But if you’re not within range of that
10-12 year window then you’re probably fine. It’s possible to have something break here and there but
the cost to repair would likely be less than paying for an annual warranty year after year.
Who should you use?
Definitely DO NOT use one of these companies that’s trying to trick you by impersonating your lender. If
they initiate a relationship with you via a lie you can guarantee they won’t be reliable long-term.
These are my recommendations on choosing a home warranty company:
- Get a personal recommendation. Realtors, Title companies and of course mortgage lenders all
have great connections for services like a Home Warranty. - Work with someone local. If something goes wrong you want to be able to rely on someone who
is based within a reasonable distance of your home. Don’t buy a home warranty from a
company on the other side of the country. - Customer Service matters. If you call a company and their customer service rep is not fluent in
English this should be a red flag that this company may not be able to address your needs when
you need them the most.
As mentioned, I have lots of great contacts for home warranty companies. If you need a
recommendation, please let me know.
Trevor Carlson
President – Equity Conversion Specialist
435-359-9000
Heritage NMLS #1497455 Trevor’s NMLS #: 267962
1060 South Main Street Bldg. A Suite 101B
St George Utah 84770