9 Lethal Reasons That Can Cause You To Lose Your House

If you don’t want to lose your house, it’s better to grab a pencil and paper and start taking notes on the mistakes you should avoid if you don’t want to put your property at risk.

Many people omit certain details that seem obvious, but they are not. When it comes to a property, you have to take care of every aspect to make sure that nothing, or nobody, takes your home away from you.

This list is made up of nine lethal mistakes with which you must keep your distance to avoid a loss of property. Some of these errors are not making payments on bank debts or with workers, not having insurance, not having an administrator, among several others.

Let’s start with our list of mistakes to avoid!

1. You don’t pay the mortgage

The first thing is, of course, you should never stop paying the mortgage. For whatever reason, you find yourself in a tough situation and you don’t think that you can cover the mortgage always, always reach out to the lender first and explain to them what’s going on. 

Never wait for the lender to reach out to you because they will automatically start the foreclosure process and that’s not a pretty picture and you definitely do not want to put yourself in that situation.

By that, it doesn’t mean that they’re going to foreclose on you right away. The foreclosure process has multiple stages. 

2. You don’t pay taxes

Lose your house taxes
Paying taxes is essential to keep yourself accountable to government entities.

Never stop paying taxes. Why? Because ‘Uncle Sam’ always comes first and you definitely don’t want to put yourself in that situation. 

If you don’t pay taxes, they’re going to place a lien on your property and that won’t be a pretty picture as well. Then the third reason that you can lose your house is if you owe money. If you owe money to let’s say contractors, you owe money to your electrician or anyone who has done work in your property, you could lose your property.


3. You don’t keep your property up to code

By up to code let’s say you need to remove the garbage because it could be a hazard for people walking by, people can trip on it, people can fall, same thing with the building structure or the house structure. 

You have to keep everything up to code. If you don’t take care of any of these, a lien can be placed on your property. The government can place a lien on your property and have the right to the money after your property has been liquidated.

Same thing for contractors, electricians and similar to those. These are people who are not happy because you’re not paying them and they have to pay their staff. They have to pay their team members. They also have a family to maintain. 

4. You don’t pay the fines

If your building is not up to code the city or the municipality is going to come and they’re going to fine you, and then if you don’t pay that fine, then they also have the right to place a lien on your property.

A lien is practically the right to possess your property until that debt is completely paid off. You can always access to the internet and get access to the latest legislation and to any information that is related to your property so you can always stay on top of everything and avoid those fines.

5. You don’t have enough reserve funds 

Enough reserves, because things happen. Your tenants can, all of a sudden decide to move out, or if you live in your home and maybe you can lose your job. What do you do if you don’t have any reserve funds? You won’t have enough to cover the mortgage. You won’t have enough to do anything else.

Banks are pretty smart about this. In fact, before closing they usually request to see a statement to make sure you have at least three months’ worth of reserve funds so you can actually cover the mortgage payment because they know things can happen down the road and they want to protect the asset as well. They want to make sure that down the road, they can still get paid.

6. You don’t have insurance

Lose your house in USA
You must be prepared for any emergency, so take out insurance and avoid these mistakes.

Having insurance in your property, it’s going to protect you for major damages or something that is unforeseen any liability that could happen down the road, because you didn’t predict that, you didn’t know it was coming down the road, and it can help you from foreclosing, from having to sell your property because you needed to pay money to someone else. 


In case of any damage, the insurance comes in, they inspect the property and they do their analysis and they wind up sending you a check for those losses so that you can use the money, to start cashing that and start the renovation of the property.

7. You don’t have an LLC or a trust

Why do I say LLC or a trust? If you’re having rentals, yes, you put that on the LLC, but if you’re living on that property, you should not place your home residence in LLC, you leave them on a trust. It could be on a land trust, or it could be on a living trust. For that, you’re going to have to reach out to an attorney or to your accountant to help with your state planning.

In case you’re wondering how you actually protect your primary residence, there’s plenty of ways for you to do that but having a trust is actually one of them, but if you’re having a rental and you’re not placing your property inside of an LLC, guess what’s going to happen? Let’s say you live in a place where you get a lot of snow and then somebody slips and falls in front of your house. You could get sued for that.

If you don’t have any protection around it, you can get sued for not only the house, but for anything that’s under your name, but if you have that property placed inside an LLC, then you are protecting yourselves against liability. 

8. You can lose your property by not having credit

No credit, call it personal or commercial credit. You actually need both. Why? Because emergencies happen. It’s like one step that you are taking to prevent one other. 

If you have credit that can allow you to go out and take out a loan or that can allow you and just simply use a credit card to cover any of these expenses to cover the monthly mortgage payment that you need.

9. The last reason why you can lose your property is by not having a property manager.

Your property manager can do so much for you. If something happens and the property and it needs immediate assistance and you’re somewhere out traveling. You don’t have time to come back here or maybe you’re at a baseball game of your child and you want to enjoy that moment with your family, but guess what?

The property managers are the ones who know all the legislation left and right. They know what’s going on in the area. They know what’s okay to do, and what’s not okay to do, and they keep you in check so that you potentially don’t get a lawsuit or anything.

All of these reasons are important for you to be aware of any situation that you may see yourself involved in, so you know who you can get help from or what to do.


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