Dear Dr. Per Cap:

Last week our home’s old air conditioner finally died.  It’s going to cost $10,000 to replace which means no family vacation and a bunch of other sacrifices.  The hub suggested we just buy a few cheap AC window units and hold off fixing the main AC until next year.  Do you think that makes sense?

Signed,

Needing Cool Air

Dear Needing Cool Air

I know what you’re up against.  I have an older home and every summer I cross my fingers that the AC will hang in there another year.  Heating, Ventilation, and Air Conditioning (HVAC) systems are insanely expensive, so much that an older system can significantly lower a home’s value.

Your hub’s idea is one way to go.  For less than $1,000 you could buy three or four window AC units and have them installed and running in an afternoon.  However, that’s a cheap quick fix you’ll want to avoid if possible.   For starters there’s no comparison between how window units cool and the original AC system your home was built with.

Window units are loud, breezy, not very energy efficient, and don’t come close to central air in terms of performance.  The best you can do is cool specific rooms intermittently while lacking smooth, quiet, consistent cooling of your whole home.

I get it though.  No one wants to spend ten grand on a home repair.  However, that’s part of being a responsible homeowner.  Sure you can hold off a year but, if you do, come up with a rock solid plan for how you will save enough to buy a new air conditioner.  The risk is that you make it through summer and come fall you’ll forget all about the AC and raid the piggy bank.

The bottom line is sooner or later you’re going to have to fix that AC so may as well do it now.   If you need some extra motivation, please remember that unlike many other home repairs a brand new AC system is considered a home improvement which adds value to your home.

City and off rez homeowners might also qualify for state or local tax breaks when replacing an older unit with a newer more energy efficient one.

Now let’s think about that $10,000 repair bill.  Most HVAC companies offer financing which is usually just a home improvement loan with a two to seven year term.  Like any loan, they’ll run a credit check and any issues can raise your annual percentage rate (APR).

Rather than borrow from the HVAC folks, I’d check with a tribal or local housing program or a community development financial institution for a home repair or improvement loan with a more affordable APR.   You might also be eligible for a federal home repair loan.

Going forward it also pays to keep a savings fund just for home repairs.  Expect to spend about 1% of your home’s value on repairs and maintenance in an average year.  Most years you shouldn’t have to spend a whole lot but every so often you’ll get hit with a big bill like a new roof or the HVAC.

A little planning and saving makes for a prepared homeowner.

Ask Dr. Per Cap is a program funded by First Nations Development Institute with assistance from the FINRA Investor Education Foundation. For more information, visit www.firstnations.org. To send a question to Dr. Per Cap, email askdrpercap@firstnations.org.