The Real Estate Loan Decision Tutorial Service |
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A Free&Clear® (F&C) home is the alternative to renting an entire lifetime. The home owner and renter have one thing in common, they will always have monthly shelter payments. After the reconveyance of the lender's liens against the home and burning the mortgage, the owner remains obligated to the local taxing authority. Property insurance is the owner's option. The F&C home owner is free from the monthly mortgage payment (P&I), but must continue to pay the recurring annual property taxes (T). It is wise to maintain insurance (I) coverage that covers all calamitous situations. The owner of a F&C Condo, Co-Op or PUD unit will continue to pay a monthly association fee that probably will include property insurance, but not personal content insurance. PITI - PI = TI. Technically, since no lender is involved, maintaining property insurance is an option not a requirement. Property insurance, that adjust for inflation and covers as many "Acts of God" disasters that are possible, is smart planning. Property taxes (T) are a recurring annual cost and reflects the government's absolute control over all real property. There is that old Ben Franklin refrain: "In this world nothing can be said to be certain, except death and taxes". Government believes in both. |
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