yes it is required...ask your insurance agent about the HO-6 policy
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Flavio Tejada, MBA-Finance, Realtor, Broker/Owner
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In general the HOA will have a master policy to cover the main structure and liability covering the HOA and its officers, you as an individual owner would need to carry a HO6 policy which covers your unit, contents and your liability if somehow something that happens inside you're unit that affects the building, i.e. your tub overflows and floods the unit below you. It is similar to renters insurance. Your HOA may have rules about minimum coverage.
As some of you mentioned, it's an HO-6 "Wall-in" policy, which covers the interior of the Unit (e.g. cabinets) and it needs to cover 20% of the loan, in this case $52K of the loan.
I don't have to choose their policy, I can shop around, which I intend to do.
Thanks again for your responses....Alex
I would first start off by asking the mortgage company to explain why they are adding this cost to you, what it includes, and whether it is mandatory. As many here have stated, a master policy will cover the building itself and the items outside of your personal residence but, as a home owner, you are responsible for your own coverage with a home owners policy. I'm not sure why you would need renters insurance for a home you own.
Good luck with your home purchase!
As others have stated...prices may be off but you have the general thought down correclly.
I believe you are correct. The condo insurance (assuming it is covered in your condo fee, something you'll need to ensure) will cover the building exterior, and your renter's insurance will cover your contents (that part should be optional, I've never heard of a lender MAKING you take renters insurance to protect your personal property, they generally don't care about your property, just theirs!). Discuss it with your loan officer. Best of luck...Jim