- A homestead declaration can be found at most business stationary stores. Once it is completed and signed in front of a notary public, it should be taken to the county recorder's office in the county where the property is located and recorded. If it is not recorded, it is invalid. It protects the equity in a home up to certain limits against claims by creditors other than mortgages, deeds, taxes or special state assessments.
- A homestead declaration may only be filed on a property that is a principal residence. It does not protect equity in a rental property. Once a homestead declaration has been filed, the equity in the property is protected up to certain limits. For example, an unmarried individual with no dependents is allowed an exemption of $50,000. If he were to sell his home, his equity would be protected up to this amount from personal creditors such as car loans or credit card debts. A married couple is protected up to $75,000 and people over 65 are protected up to $125,000.
- The costs associated with filing a homestead declaration include paying a notary to notarize the declaration and the cost of recording the document with the county recorder. By filing a homestead declaration, you are creating a form of insurance that helps protect your equity. It is only valid for real property and cannot be used to protect a mobile home, car or boat. The declaration does not provide protection against judgments for child or spousal support. The only disadvantage to filing a homestead declaration is that some creditors will not
- The primary benefit of filing a homestead declaration is that it is an inexpensive way to protect your home equity. The costs are minimal, and the protection it provides makes it well worth the effort. In some states, a homeowners exemption automatically applies, however to be certain your home is protected, you should file the declaration anyway.
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