Let me set the scene- You have a mortgage in Mesa and you pay every month and your home is beautiful and you love your neighborhood. Do you like the setting so far? One day, something tragic happens-your home catches on fire. The damage can be fixed, thanks to home owners insurance but it doesn’t discount the tragedy and disappointment. Several months later, your home has been repaired and it looks amazing and you are happy to still have your home.
Let’s look at the flipside of the story. What if you didn’t have insurance? Not only would you not have a home or the money to repair the damages but the bank who has a lien on the home (ya know, the kind ones that gave you the money to purchase the home) would be at a significant loss. The money that they let you borrow for the Mesa Jumbo Loan can’t be returned unless you happened to be independently wealthy and in that case, you probably didn’t borrow the money… Everybody would be at a loss and what to do?
Back to the story and its purpose. Banks, aka lienholders, require insurance and property taxes be paid. They like to pay it themselves (by adding it to your payment every month) so they can be certain that it gets paid. We all live busy lives and we are all human. It is quite possible that we could forget to pay the insurance-maybe coverage would lapse? We could forget (or not have the money when the HUGE bill came in the mail) to pay the property taxes and the government could put a lien on the home. These situations are ones that can be avoided by having it added to your mortgage payment.
So what does that mean? Simple-we take enough each month so that when the annual amount is due, it can be paid but US-not you. Doesn’t it sound like you just gave one of your bills to the bank? What a sense of freedom that comes with knowing your taxes are paid, your insurance is paid and you don’t have to worry about it!
If you are one that prefers to pay your own property taxes and home owners insurance, no worries-it can be done. Let’s talk about the details and requirements and determine if its right for you!
