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Old 06-16-2011, 08:19 AM
 
413 posts, read 871,392 times
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I hope this is the rite forum to ask this question, I am a first time home buyer and will be closing in 2-3 weeks, will like to know about Home owners insurance, how much should be sufficient for a 225K house, and what are the essential things and what are optional ?

Thanks
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Old 06-16-2011, 08:38 AM
 
Location: The Triad (NC)
26,844 posts, read 57,851,863 times
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You really need to run this by the LENDER...
for what THEIR standards are and which they WILL insist that you meet
while they CONTINUE to own far more of the home than you do.

Add into that the STATE requirements for ALL liability and property policies...
and there won't be much wiggle room for you at all.

About the only real choice you'll have is which company to use.
Generally that will be the company to ALSO insure your vehicles
(to get some discount on both).
---
hth
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Old 06-16-2011, 09:06 AM
 
Location: Ohio
17,998 posts, read 13,238,246 times
Reputation: 13781
Quote:
Originally Posted by phoenix_new View Post
I hope this is the rite forum to ask this question, I am a first time home buyer and will be closing in 2-3 weeks, will like to know about Home owners insurance, how much should be sufficient for a 225K house, and what are the essential things and what are optional
You need to frame this and hang it in your apartment:

Quote:
Originally Posted by MrRational View Post
You really need to run this by the LENDER...
for what THEIR standards are and which they WILL insist that you meet
while they CONTINUE to own far more of the home than you do.

Add into that the STATE requirements for ALL liability and property policies...
and there won't be much wiggle room for you at all.
You sound like a foreclosure waiting to happen.

Your real estate attorney should have very clearly advised you on the matter of insurance when he reviewed the contents of the loan documents with you.

If you don't have a real estate attorney, or cannot afford one, then you probably have no business buying a home.

You do understand that when you buy a home, you don't really own the home, right?

I mean the reality is that you're just a ritzy glorified tenant paying an exorbitant rent every month until you pay off the note and you are handed the title/deed, at which time you really do own the home in a very real a literal sense.

By State and federal laws, any changes or alterations you make to your homeowner's policy will result in the insurance company automatically notifying the lender of those changes and alterations, so don't think for a moment you'll get coverage and the drop or reduce it later without the bank knowing about it.

The lender will then purchase insurance to cover the deficiency, and add that on to your mortgage, then modify your mortgage payments, and I guarantee you whatever you were paying it will cost you double or triple through the bank.

If you need a flood rider, and that costs an extra $70/month, and you drop it, the bank will purchase a flood rider, and it will cost $140 or $210 per month, and they will add that to your mortgage, and if you default on your payments, the bank will foreclose within 120 days as required by federal law.

Your real estate attorney should have explained all that to you.

Your homeowner's insurance agent should know what lenders require for your area of the country, and that would include earthquake, hurricane, tornado, flood or any other riders that are necessary

The only choice you will have is in the amount of the deductible, and even then, if you're deductibles are too high, the lender will re-check your financials and insist on lower deductibles.
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