Why Should You Have An Emergency Fund?
If you are thinking of buying a home this year, it's important that you are financially prepared. If you don't know what an emergency fund is, you should educate yourself on this subject before you get too far into the home buying process. Our mortgage company at the Lake of the Ozarks is here to give you a few reasons why you should have an emergency fund in this week's blog. If you are interested in buying a home and need a mortgage lender at the Lake of the Ozarks you can count on, call MHQ - Mortgage Headquarters today.
Why Should You Have An Emergency Fund?
Have you ever heard the expression, "Prepare for the worst and hope for the best." This notion is why you should have an emergency fun when owning a home. Homeowner's insurance doesn't always cover everything. Keep reading for a reasons an emergency fund can come in handy.
Costly House Repairs
Let's say your HVAC unit breaks down unexpectedly. This isn't necessarily something that's covered on your homeowner's insurance policy. This could potentially be a multi-thousand dollar repair. It's very rare to just have that kind of spare money lying around unless you purposely put funds like this into your emergency fund.
To Help You In The Event That You Are A Single Income Household
Whether you are single or married and the financial provider of the home, while your spouse stays home with your children, having an emergency fund in place, can really benefit you. You should have the goal of having at least one year's expenses saved. (Src. The Balance)
To Act As A Home Only Account
Let's say you have a pretty hefty debt, but it's mostly student loans, credit card debt etc. Having an emergency fund that's only for your house can really help you when major household repairs need to be done. You can strictly pull from the home only account versus your savings that you are probably already having to dip into to pay off other debts.
We have spoken a lot about homeowner's insurance so far, keep reading for a sample of what insurance closing costs may look like.
Insurance Closing Costs
Homeowner's Insurance
This insurance covers replacement costs for damages caused by fire, wind, or other disasters that might affect the value of the property. Typically, insurance also includes personal liability and theft coverage.
Flood or Quake Insurance
Additional hazard insurance coverage that is required for homes located in a designated hazard zone as established by the Federal Emergency Management Agency (FEMA). An appraiser, inspector, or your realtor can let you know if a property resides in a hazard zone.
Private Mortgage Insurance (PMI)
Insurance required for conventional mortgage loans when the borrower's down payment on the house is less than 20 percent of the loan value.
Title Insurance
This policy protects both the buyer and lender by insuring a clear chain of title. (In other words, it ensures that the person who sells the house has the legal right to do so.)
Have Any Questions About Your Mortgage or Whether or Not You're Ready To Buy A Home?
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