Remember the Responsibilities of Owning a Home

 

 

Owning a home has always been part of the American dream. For many, it shows that they have accomplished something previous generations may not have. As a homeowner, you now have the power to positively affect your life and the life of your family.

 

 

There are many responsibilities that come with this powerful change, though. Some were probably mentioned during the mortgage process. Given all the changes in the housing and financial markets and the growing number of foreclosures, it would be helpful to quickly review some homeowner responsibilities.

 

 

Whether you are searching for a new mortgage or are refinancing the one you have, credit plays a major factor in the lender’s decision. It affects interest rates, closing costs, and the programs for which you qualify. If you have worked hard to pay your bills on time or pay off your existing debt, you want to make sure you continue that pattern of good behavior by paying your mortgage on time each month.

 

 

What you qualify for and what you can pay each month are two different things. While it is the lender’s job to qualify you, it is your responsibility to make sure you can afford the payment. A good loan officer will do both, but the burden is still yours.

 

 

If you are looking to purchase, make sure you avoid taking on more debt than you can comfortably handle. If you already own and are having difficulties, banks are reasonable if you are reasonable with them. Communicate with your lender or speak with a counseling agency to discuss options as soon as you know there is a problem. Do not wait for a notice of foreclosure to arrive in your mailbox.

 

 

Nothing is Certain in Life but Death and Taxes

Okay, this may be a little dramatic, but rest assured, taxes are due and payable even in the event of death. Some mortgage products on the market allow borrowers to pay taxes separately, but if you are just starting to look at purchasing a property, look for a mortgage loan that allows escrows.

 

 

An escrow account pays your taxes (and sometimes insurance) when the bill is due. Each month, your mortgage payment includes principal and interest on the loan as well as a portion of your taxes and insurance. (Insurance for a condo is typically handled differently.)

 

 

The lender is notified when taxes are due, and it cuts a check and sends it to the town or city. Picture it like a savings account for your taxes. It means you never have to worry about writing out a large, surprise check for your taxes. Escrow accounts are standard in the mortgage industry, and for good reason. Not only can a lender foreclose on your house if you don’t pay your mortgage, but also the town or city can come after you, if you don’t pay your taxes.

 

 

If you missed the opportunity to establish escrow accounts when you purchased or last refinanced your home, it is not too late. Start by contacting your lender directly. Most lenders will allow you to add an escrow account. Depending on when your taxes are due, you may need to come up with part of the tax payment. You should not have to pay a fee. If the lender states that there is a fee, do not be afraid to ask to waive it, especially if you have paid your mortgage on time in the last twelve months. It is to the lender’s advantage to have an escrow account.

 

 

As a homeowner, you want to make sure you are up to date on all taxes for both home and autos. In addition, you need to be current on your insurance. If you are thinking of buying your first home and you already own a car, speak with your car insurance company regarding insurance rates. If you already own a home and a car but have separate insurers, contact both companies regarding combining your bills. Most insurance companies will give you a discount. It is a great way to save money.

 

 

Remember, keeping up with taxes and insurance on your car allows you to get to work. Getting to work means you can generate money to pay your bills on time and save for your future.

 

 

Your House is Your Home; Take Pride in It

When you own your home, you have an impact in your neighborhood and your community. Homeownership helps lower the taxes for everyone.

  

If you own a home, you are responsible for keeping your property safe and clean, both inside and out. Having the nicest house on the street doesn’t always mean having the biggest house. Doing regular maintenance to both the inside and outside of your house will help sustain the value of your home. Putting up flowers, planting trees and shrubs, or mowing your yard regularly will show your pride and make your neighbors happy. Take pride in owning the American dream. Make your home a warm, comfortable place to live; make it really stand out on your block.

 

 

Keep Saving; You’ll Need It

Keep saving, even after you purchase your home. Having a reserve account for emergencies and ongoing maintenance is important. You want to avoid using credit to cover those items. It is also important to maintain a reserve account in case you have a sudden dip in income from injury or job loss. Knowing you can pay your mortgage for the next two or three months will relieve a significant amount of anxiety from your life.

 

 

Most of all, remember that when you buy your first home, you do not have to fix or furnish every room and every item in the first month or even first year. If you took out a thirty-year mortgage, you have plenty of time to make that home into something you will love. Buy the essentials first.

 

 

While there are many other things that go into owning a home, if you can accomplish the things in this article, you are well on your way to reducing your headaches and frustrations

 

 

Gary A. Evans is the Director of Housing and Community Development for Co-opportunity, Inc. In Hartford, Connecticut.  He can be reached at garye@co-opportunity.org or 860-236-3617