It's hard to imagine that one day your home might be gone, destroyed by a natural disaster or fire. It happens more often than you might think. Often enough, in fact, that the federal government and mortgage lenders are prepared to step in and help you if the worst happens. Options exist for dealing with your mortgage, as well as for repairing your home.
Take Basic Precautions
If disaster does strike, you'll need to get your hands on certain information immediately. If your homeowner's insurance policy is in your desk drawer at home, and your home is destroyed, you'll have to get a copy from your insurer. Consider keeping important papers like policies and mortgage documents in a safe deposit box, or in some location other than your home.
Your Lender May Work With You
Your damaged home might require major repairs or even be uninhabitable. Either way, it will cost a great deal of money to set things right again. Your insurance may not cover all of the expense. If you can't make your mortgage payments for a few months, contact your lender. Many lenders will work with you to restructure or modify your loan to give you a few months off from making payments. This is especially true with FHA and VA loans.
The Federal Government May Help
The Federal Emergency Management Agency helps homeowners struck by disaster. If you have to leave your home, FEMA may be able to help you with temporary housing. You might also be able to get a loan from the federal government to help with costs not covered by your insurance. However, there are limits. FEMA help is available mostly when a home is destroyed in a natural disaster.
You Might Get a Break on Your Taxes
The IRS also offers tax help when disaster strikes. But the rules are complicated and you might need the help of a professional to figure out what you're entitled to. Casualty losses (the costs of severe damage to your property) are tax deductible, but only the portion that has not been reimbursed by your insurance company or other disaster assistance. Additional tax breaks are available if your neighborhood is in a federally declared natural disaster area.
A Real Estate Lawyer Can Help
The law surrounding help for homeowners after man-made or natural disaster is complicated. Plus, the facts of each case are unique. This article provides a brief, general introduction to the topic. For more detailed, specific information, please contact a real estate lawyer.