Outside of the significant financial responsibility of delving into home ownership, there can be some other risks involved which you may not have thought about as a new homeowner. While the requirement of homeowner's insurance is well known, 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 and low moisture, so it's important to do your research.
Your Realtor should be able to provide you with information regarding how the area is designated in terms of fire. If you decide to shop homes in high risk zones, a great resource to educate yourself is Firewise USA, Residents Reducing Wildfire Risks. You’ll find lots of information and tips on their website, like looking for homes built with fire-resistant construction, such as brick, cement, plaster, stucco, and concrete.
What It Means For Your Mortgage
There are many homes that 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 cost a little more in high risk areas. It’s possible you may be able to guard against some of the additional costs by following the guidelines set forth by the above mentioned, Firewise USA, Residents Reducing Wildfire Risks.
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 which has been 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 very familiar with your insurance policy so you are prepared.
It's higher risk to buy a home in a fire-prone area, but you can be prepared for the worst by doing your research up front and knowing your options.