Tips to Protect Your Real Estate Investment
BY: DYLAN MORAN ON FRIDAY, MARCH 17, 2017
There’s nothing quite like getting on the property ladder. Buying your first house is one of the best feelings in the world. It’s a sign that you’ve truly made it in the world. However, there’s a big difference between buying property and losing it. Losing property is easier than you would think, and far too many people fall victim to the following ways you can lose your property.
Missing Mortgage Payments
A general rule of mortgages is that you can get past-due notices if you don’t keep up with the payments. If you continue to not pay the mortgage, then you’ll start receiving notices about foreclosure. If you still continue to not pay, then you’ll get a “friendly” visit from the sheriff, who will help you get everything you own out of the house, because you don’t own the house anymore.
It’s essential that you don’t take out a mortgage you can’t afford to pay back. Sometimes things happen outside of your control that leave you unable to pay the mortgage; such as losing your job, but being prepared can go a long way. Find the right mortgage for your budget, rather than choosing one for that dream house you can’t afford.
Not Paying Taxes
There are taxes that come with owning property; specifically the property tax. If a homeowner fails to keep up with their property tax payments, they could find themselves slapped with tax liens. The property owner has a redemption period in which to pay back the lien, but if they fail then people can invest in tax liens online and claim the debt (and the house) for themselves.
If you don’t want to lose your home as a result of not paying tax liens, then it’s essential for you to immediately pay off the owed amount. A redemption period can be up to a few years, so you do have some time to get it done. Of course, if you have some money and are looking for an investment, then you should consider investing in tax liens yourself.
There was a time when declaring bankruptcy would protect you from losing your home to debt collectors. Bankruptcy laws changed a few years ago, however, and now creditors have been given the advantage when it comes to bankruptcies. While the new laws do allow for the debtor to arrange payment terms within 180 days, it doesn’t actually stop the foreclosure process. Given that the foreclosure process can take less time than the repayment period, you could lose your home before you even have a chance to pay off your debt.
Not Paying Homeowners Dues
It’s great to be part of a homeowners association, but things can quickly go bad if you have a falling out with them. The last thing you want to do in this situation is withhold on paying the homeowners dues you typically offer up each month. If you build up too many owed fees, the homeowners association can actually seize and auction your property in order to pay off the missing money. No matter what kind of problem you have with your HOA, you should never cut off those payments if you want to keep hold of your house.
The concept of losing your home through illicit activity is a little daunting, as the American Civil Liberties Union (ACLU) suggests that some 80% of all people who lose their homes through seizure by the federal, state, or local government were never actually convicted of a crime. You don’t even need to be convicted to have your home seized. All that matters is that the officials have probable cause to suspect the home was used to conduct crimes, or that it was purchased through illicit and ill-gotten money. So keep your work clean!
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