Sunday, January 6, 2008

Mortgage/Insurance Issue

Check out this post by Colleen Doran. No matter what your real estate agent or insurance broker might've told you, it's possible that your mortgage and/or insurance are null and void if you have a home office or just do business from your home. She says:

I sat down and REALLY read the fine print in my home loan agreement, and even though I had been told that my home office was OK and that my being an artist would not be a problem, the actual language of the loan specifically forbid my running any business from my home.

Ever.

For any reason.

...

And at any time, if I had been called on it, I could have lost my home. The bank could have withdrawn the loan and foreclosed on my home because I was drawing comics in my home. No kidding. One neighbor with a grudge and a little smarts, and I could have lost my HOUSE.


Same with insurance. If your policy specifically forbids a home office, then if your place gets flooded out or burned down or quaked into a pile of rubble, you could be left with nothing if you do any work out of your house.

Check the fine print on your mortgage and insurance paperwork. I'm going to. :/

Angie

6 comments:

Charles Gramlich said...

Wow. This never occurred to me. I'm not officially incorporated as a business but I still better check this out.

Angie said...

Charles -- yeah, it's a good idea to double-check. It looks like our mortgage is okay, and my husband is checking our homeowner's insurance. I'm sure that's fine too [crossed fingers] but I'll feel better knowing for sure.

Angie

writtenwyrdd said...

Horrors! Of course, if you follow that logic, having a garage/tag sale would put you in jeopardy as well.

Angie said...

WW -- Humm, I don't think so, because you wouldn't actually have an office or set-up work area in your home. Also, it's one time (or at long intervals) rather than ongoing, and it seems that should make a difference. [ponder]

Of course, it might well count if some official wants to be a jerk. I remember reading somewhere, for example, that the IRS can get you for not claiming the income from little Chrissy's lemonade stand, if they officially notice it and decide they want to be asshats about it.

I think it would depend how your mortgage or insurance policy is actually worded, and then whether or not whoever was responsible for enforcing the restrictions felt like being a jerk this morning. I don't think I'll worry about garage sales right now, though. :)

Angie

Totie said...

Good words.

Angie said...

Totie -- thank you. :)

Angie