Outside of the significant financial responsibility of delving into home ownership, there can also be a lot of other risks involved that you may not have thought about as a new homeowner. While the requirement of homeowner’s insurance is well known and guarding your house against theft can be commonplace, if you happen to be living in an area that’s at high risk of fire, here are some things to consider beforehand.
Defining High Risk
Whether you love an area or it’s relatively unfamiliar, it’s easy to be swept away by a home and forget about what the natural landscape can entail. However, many homes across the United States are built in areas close to trees and shrubs, which can be dangerous in times of high temperatures, so it’s important to do your research. For example, while hot spots can occur in many different areas, California and the southwest region are particularly vulnerable in times of drought and high temperatures.
What It Means For Your Mortgage
Many homes can be adversely affected by a fire, so it’s important to realize that buying in a high-risk area will not impact your ability to get a mortgage. It can, however, impact some of the costs associated with investing in your home. While homeowner’s insurance is a requirement of buying a home and it will generally cover you in the incidence of a fire, it can be a bit pricier. Fortunately, you may be able to guard against some of the additional costs by purchasing a home with materials that are more fire resistant.
In The Event Of Fire
If the worst happens and your home incurs damage from a fire, you’ll want to assess the extent of the damage before making a decision. For a home that is minimally impacted, you may want to use insurance to repair the property. However, if the property is completely leveled, a payout may be required to pay off the mortgage. It’s advisable before purchasing a home in a fire-prone area to be aware of your insurance policy so you can be prepared.
It’s a more significant risk to buy a home in a fire-prone area, but you can be prepared for the worst by being aware of the situation up front and knowing your options. If you’re currently considering purchasing in a high-risk area, you may want to contact one of our real estate professionals for more information.