What Happens to Your Austin Mortgage While You’re Deployed or PCSing
A mortgage doesn't pause for deployment or a PCS move, but there are protections and practical steps worth understanding before you leave your Austin home behind.
Table of Contents
- Quick Answer
- What Happens to My Mortgage Payment During Deployment?
- How Does the SCRA Protect My Interest Rate?
- What About Escrow and Property Taxes?
- What Changes Do I Need for Insurance If I Rent My Home?
- What If I Fall Behind on My Payments?
- What Should I Set Up Before I Leave?
- Frequently Asked Questions
- Checklist Before Deployment
- Summary
- Call to Action
Quick Answer
Your mortgage obligations remain intact while deployed or PCSing, but the Servicemembers Civil Relief Act (SCRA) provides protections that can help manage your payments.
What Happens to My Mortgage Payment During Deployment?
Deployment or a PCS move does not change your mortgage obligations. Payments must continue, whether you occupy the home, rent it, or leave it vacant. Setting up automatic payments is a proactive step to manage your obligations while you're away.
How Does the SCRA Protect My Interest Rate?
The Servicemembers Civil Relief Act (SCRA) caps interest rates on mortgage debt incurred before active duty at 6% under specific conditions. To utilize this benefit, you must submit a written request to your lender, including proof of your active-duty status. More information is available on the official SCRA site and the U.S. Department of Justice's SCRA information page.
What About Escrow and Property Taxes?
Payments for property tax and insurance in an escrow account continue automatically as part of your mortgage payment. Ensure your insurance policy is updated to a landlord policy if you are renting out the property. Failing to do so could leave you liable for gaps in coverage.
| Mortgage Aspect | Owner-Occupied Policy | Landlord Policy |
|---|---|---|
| Coverage Type | Residential Coverage | Rental Property Coverage |
| Typical Coverage Amount | Higher (for personal use) | Adjusted for rental value |
What Changes Do I Need for Insurance If I Rent My Home?
Switching from an owner-occupied mortgage to renting your home entails changing your insurance. A standard homeowner's policy generally doesn't cover rental use. Failing to update to a landlord policy can leave gaps in coverage, impacting your financial security if repairs are needed or if a tenant causes damage.
What If I Fall Behind on My Payments?
The SCRA also provides protections against foreclosure for service members during a period of military service. If you find yourself unable to make payments, it is essential to contact your lender immediately to discuss available options. Lenders may offer forbearance or other assistance to help you manage your mortgage while deployed or PCS'ing.
What Should I Set Up Before I Leave?
Before leaving for deployment or a PCS, take these steps to ensure your mortgage is managed effectively:
- Set Up Automatic Payments: Ensure your mortgage payments are automatically deducted to avoid missed payments.
- Notify Your Lender: Inform your lender about your deployment status and request SCRA protections if applicable.
- Secure Your Home: If leaving the house vacant, consider arrangements for monitoring and maintenance to protect your property.
- Update Your Insurance: Change your homeowner’s policy to a landlord policy if renting.
- Organize Documentation: Keep important documents accessible for both your mortgage and insurance needs.
Frequently Asked Questions
Generally, no. However, the SCRA offers certain protections that can help with managing your payments.
Contact your lender as soon as possible. They may provide options like forbearance or modified payment plans under the SCRA.
Yes, it’s wise to inform your lender about your deployment to ensure you can access any benefits available under the SCRA.
