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If Your House Is Destroyed, Are You Still Obligated to Pay the Mortgage?


You know when taking out a home loan that you are promising to make your monthly payments on time. But what happens if your home is destroyed by a natural disaster or another calamity? Are you still obligated to make your mortgage payments even if your home is no more?

The short answer? Yes.

The promissory note you signed at closing/settlement means that you must keep making your mortgage payments to your lender. But don't panic: Lenders are usually flexible in the face of a disaster.

If your home is destroyed, call both your insurer and your mortgage lender. If you took out a mortgage loan, you were also required to take out homeowners insurance. And, if you've been in contact with your insurance agent over the years to update your coverage as needed, that policy should cover the costs of rebuilding your home. Your standard homeowners' insurance policy should also pay for replacing the items inside your home that might have been destroyed.

Talking insurance

Discuss with your insurer what items are covered and up to what amount. You want to make sure that you understand how your insurer plans to help you get back inside your home and replace your belongings.

Talking mortgage

Calling your mortgage lender is just as important. Your lender might be willing to put a temporary hold on your mortgage payments while your home is being rebuilt. You won't know whether this is possible unless you call.

You never want to see your home destroyed, but if it is, don't forget to make those important calls. And don't just stop making your mortgage payments. Falling behind on your home loan will add more hardship to an already difficult situation.


When one door closes, another opens. If you're in the market for a new home, whether it's by choice or not, feel free to reach out to me to discuss your options.

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Dan The Real Estate Man
Dan The Real Estate Man
(562) 618-4993
Century 21 Classic Estates
13217 South St.
Cerritos, CA 90703
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Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
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