Even if your home was wiped out by a disaster like a wildfire, you still have to keep up with your mortgage and property tax payments.
But, if you're facing hard times because of the disaster, there are ways to get some relief or help with those payments. This help doesn’t just happen, though—you need to ask for it from your mortgage company and the local tax office.
How Does This Affect Your Mortgage?
Just because your house is gone doesn’t mean your mortgage disappears. You still owe the bank the remaining money you borrowed to buy your home.
"Your mortgage payments don’t stop. The agreement you made when you borrowed the money still stands, regardless of whether your house is standing or not," explains Zev Freidus, a real estate expert.
Even having insurance that covers your mortgage won’t get you off the hook for making payments. This type of insurance actually protects the lender, not you.
If you stop paying, your credit score could take a hit, and you could even lose your land, which can be especially valuable in places like Southern California.
Can You Get a Break from Mortgage Payments After a Disaster?
You might be able to pause your mortgage payments for a while. This is called disaster mortgage forbearance. But, don’t wait for your lender to offer; you should reach out to them to discuss your options. Keep in mind, getting a forbearance isn’t guaranteed.
According to Neama Rahmani, a legal expert, "There’s no promise your bank will pause your payments, but they might let you delay them and then add those months to the end of your loan term."
Options for catching up later can include paying everything back at once, spreading out the owed amounts over time, or adding missed payments to your loan balance to be paid off later.
What About FEMA and Mortgages?
The Federal Emergency Management Agency (FEMA) doesn’t provide help directly with mortgages. But if a disaster damages your home, FEMA might help with other things like temporary housing or repairs.
You can't get a mortgage modification through FEMA, but they do offer other kinds of housing help if your home is damaged in a big disaster.
What If You Can’t Pay Your Mortgage Because of a Disaster?
Get in touch with your mortgage company right away if you’re having trouble making payments after a disaster.
The kind of help you can get varies, but given the widespread damage from things like wildfires, mortgage servicers may be more willing to offer some relief to avoid a lot of people defaulting on their loans.
And Property Taxes?
Yes, you still owe these, but a disaster might change how much you owe or when it's due.
You should aim to have your property’s value reassessed (since it’s likely worth less now) and ask to delay your tax payments.
The specifics of getting property tax relief depend on local laws and policies. In California, you can apply for reassessment of property taxes based on the damaged condition of your property.
In Conclusion
Fires or other disasters create tough situations, but there are steps you can take to manage your mortgage and property taxes during these times.
Remember, getting any relief usually requires proactively contacting your mortgage servicer or tax office.
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