Natural disasters are a serious issue for home owners, whether they have just closed, paid off their mortgages, or are somewhere in between. When a hurricane strikes, when flood waters rise, or when other acts of nature threaten, damage or destroy homes, many aren’t sure where to turn or what to do first.
FHA mortgage loan options in these cases depend on a variety of factors, but there is help available to rebuild and recover. FHA mortgage options include 203(k) and 203(h) loans (including refinance loans) that can help home owners recover, but what do to in the meantime?
The first thing a home owner should do is contact FEMA to see what assistance may be available on a federal level. For the most recent (at the time of this writing) issues related to Hurricane Matthew, FEMA has set up a special page at https://www.fema.gov/node/292516?utm_source=hp_promo&utm_medium=web&utm_campaign=femagov_hp.
State and local agencies may also have help waiting. Home owners should contact these agencies as early as possible to see what kinds of assistance are possible.
For borrowers who are currently making payments on a home that could be or has been damaged/destroyed in a natural disaster, it’s crucial to make contact with both your loan officer and your insurance agent as soon as possible.
It’s also crucial not to be rushed into insurance settlements-the promise of fast cash in the early stages of recovery may be appealing, but without knowing the full implications of settling early, a home owner is at a disadvantage. Don’t be pressured into settling-know your options, rights, and responsibilities.
When it comes to your mortgage loan payments, it’s never safe to assume that your home loan is not due. Your lender may be willing to work with you on payments (including late or missed payments as a result of the disaster) but making these arrangements specifically is key.
For FHA borrowers, the FHA official site says, “If you can’t pay your mortgage because of the disaster, your lender may be able to help you. If you are at risk of losing your home because of the disaster, your lender may stop or delay initiation of foreclosure for 90 days.”
“Lenders may also waive late fees for borrowers who may become delinquent on their loans as a result of the disaster. If you have a conventional mortgage, you are strongly encouraged to contact your lender for further information, and to see if you are eligible for relief.”
Some types of disaster relief are only available once the President declares an official disaster area. When you contact FEMA, be sure to ask about the status in this regard to see what help might be currently available or become available soon.