Now that you've purchased your home, how do you protect it?
First, you can insure every year you get an "Insurance Checkup" to make sure your coverage adequately protects the value of your home.
You want to also insure you continue saving and building a safety "nest egg" for unexpected repairs. A good safety egg for repairs is $3500.00. This amount should cover anything from a new air conditioning unit, to emergency roof replacement. Learn about all your appliances, air conditioning unit and air handler and be sure to perform periodic maintenance as prescribed by the manufactures.
If you can, insure you keep credit life and disability payments up to date. This will protect you against unexpected financial crisis as result of death or injury. Finally, if you find yourself in a position where you cannot make your payment, communicate with your mortgage holder.
They no more want to foreclose on your home than you want for them to. The key to preventing this, buying time and working out terms is maintaining open lines of communication with the mortgage holder.
What is foreclosure? It is the legal process by which your ownership to a property is terminated through a forced public-auction sale. This usually occurs due to default, or failure, to pay your monthly mortgage payment.
There are two types of foreclosure:
Nonjudicial Foreclosure is a foreclosure not brought before a court. Typically, the foreclosure conditions are contained within the mortgage deed which conveys the property's power of sale to a trustee in case of default.
Judicial Foreclosure is a foreclosure that uses court action to sell a property in order to pay a mortgage in default.
Since we are here to discuss protecting your property, we'll go into the primary and most important things you can do to protect your investment and prevent its loss during difficult financial periods.
When you find yourself in a position where you can begin making full payments, discuss with your mortgage holder the possibility of placing the past due amounts into forbearance. Typically forbearance will be easy to achieve for home owners that maintained a good relationship and communicated well with the mortgage holder. Forbearance entails taking past due payments and averaging them out of a set period of time. This amount is then added to normal payment for a fixed period to repay the past due payments and maintain current payments.
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