The Financial Shield Against Repair Inflation
Post-2020 economic shifts have driven the cost of HVAC, plumbing, and electrical repairs up by over 40%, significantly outpacing wage growth.
First-time homebuyers (58% of the market) often exhaust savings for down payments. A $6,000 furnace failure in the first year can be financially ruinous, potentially triggering mortgage default.
By offering or gifting a warranty, the lender acts as a financial fiduciary, protecting the borrower's budget from inflationary repair shocks.
For new construction, structural warranties mitigate risks for both lender and buyer regarding construction defects.
Lenders utilize warranties as "loss leaders" to build goodwill and ensure their digital hub is established on the borrower's phone immediately after closing.