Home Insurance in 74820>Question Details

Charles Teel, Real Estate Pro in 74820

Why do I have to have insurance before closing?

Asked by Charles Teel, 74820 Tue Nov 12, 2013

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7
Sally Grenier’s answer
Interesting that you're an agent asking this question? And you answered your own question? This might be more suitable for a Blog topic. Not the Q & A section (which is intended for the public to ask agents questions about buying and selling real estate).
0 votes Thank Flag Link Tue Nov 12, 2013
BEST ANSWER
If you are getting a mortgage the lender wants to make sure their investment is insured. If you are paying cash then it your risk.
0 votes Thank Flag Link Tue Nov 12, 2013
This is typically a requirement in the Mortgage and Note, check with your lender if they have that requirement.

If this is a CASH deal, you do not have to have insurance unless there is a deed restriction stating such.
1 vote Thank Flag Link Tue Nov 12, 2013
Think about it. The bank is giving you money to buy the home, so they want to make sure it's insured. Just like when you get a loan for a car, you have to insure it. Let's say the house burned to the ground and you didn't have insurance for it. The bank is stuck with nice lots and nothing on it.
0 votes Thank Flag Link Tue Nov 12, 2013
If you are getting a mortgage the lender wants to make sure their investment is insured. If you are paying cash then it your risk unless there is a deed restriction stating such.
0 votes Thank Flag Link Tue Nov 12, 2013
Three reasons.
1. BAnk won't let you use their money to buy a house if it is not insured.
2. The bank can not SELL your mortgage unless the house is insured.
3. To prevent the bank from foreclosing because the home owner let the insurance laspe.
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Now, if you willl, imagine what the ramifcations are regarding existing homes. in a FEMA designated flood zone, occupied for years by the owner who in the next 5 years will get flood insurance premiums that are 250 times the current premium. In many cases, four years of premium payments will exceed the value of the 1963, 3/2/2 rancher home with that awesome big water view.
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Then there's always that pesky situation where helpful but crazy Uncle Bill fell on his head from the back of the U-Haul truck.

Best of success,
Annette Lawrence, Broker/Associate
Remax Realtec Group
Palm Harbor FL
727.420.4041
Move to the Front of the Line
(http://FirstLookHomes.us)
0 votes Thank Flag Link Tue Nov 12, 2013
Your new insurance payment is part of your expenses when you purchase the home. The bank is looking for two things: 1. That you can be insured by a company that offers the coverage you need to satisfy the requirements of the loan. 2. That you can afford the mortgage AND the insurance payment since they will both be included in your monthly expenses calculation.
0 votes Thank Flag Link Tue Nov 12, 2013
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