According to Ramsey Solutions, 42 percent of American households have a mortgage. Mortgages account for 70 percent of the debt held by American consumers. Lenders generally require borrowers to maintain a standard property insurance policy, but whether to obtain additional coverage to completely insure the losses that can be incurred when a home is destroyed is often left to the borrower. The expenses associated with losing one’s home can add up quickly, often before there is time for the insurance provider to consider the claim.
If your home is lost due to a fire or a weather-related event, it is good practice to let your lender know about the situation. In many cases, the lender can provide a mortgage forbearance. This allows you to withhold mortgage payments for a set amount of time, allowing you to get back on your feet. Mortgage forbearances generally last six months, with the ability to extend the forbearance for an additional six months.
It is important to note that typically your lender will want you to catch up on your mortgage payments after the forbearance period is over, which will mean paying additional money each month on your mortgage for a while.
There are organizations and governmental entities that can assist those who have lost their homes due to a disaster.
For example, the Federal Emergency Management Agency (FEMA) provides aid through its Individuals and Households program, such as:
Temporary housing assistance
Lodging expenses reimbursement
Home repair or replacement
Permanent housing construction