Refinance hurdle - Flood Insurance (approved, rate, refinancing, loan) - Mortgages -Lenders, loans, financing, rates, foreclosures, short-sales, brokers, credit score, deed, lien, refinancing, borrowers - City-Data Forum

PokerMunkee · 03-24-2012, 11:37 AM

So, we bought a house 3 years ago that is in a High Risk zone for flooding. Not sure why we still went through in buying the house, probably because we loved the house and lot, got caught up in the moment of buying our first house. Should put 60% of the blame on our realator that made the entire 6% comission (represented both seller and buyer) for not putting his arm around us and telling us not to buy it. Can't go back now. It's high risk because of a drainage ditch behind the house.

Anyways, we went through with it because we bought Homeowners Catastrophe Insurance Trust (HCIT) that is underwritten through Lloyds of London. It cost us $750/year to insure building and contents up to $250k. Much better than the FEMA insurance which is close to $3,000. I don't mind paying the $750, which covers us for earthquakes, flood and whatever else.

So now we are refinancing to a 20year/4% mortgage and our broker is saying he's heard catastrophe insurance may not be acceptable to his lenders. He is still checking on it, but if he comes back saying I need the 3x more expensive flood insurance, then I'm not refinancing. It's not worht it. This is the same broker/bank we used on the original loan, which they sold to Countrywide, who then sold it to Chase over 2 years ago. I haven't heard from Chase that HCIT isn't acceptable.

Anyone have experience with this?

Note to others: NEVER buy a house on a high risk flood zone. What a headache. Probably be stuck with this house forever, maybe just end up renting it out and being an "investment" property. lol. Oh well, it is what it is. /rant

SouthernBelleInUtah · 03-24-2012, 02:16 PM

Some times you just can't help it. I lived in New Orleans/Metairie for close to 40 yrs. BAck then, the national flood insurance was not very expensive.

markintosh · 03-26-2012, 09:33 PM

Hi - So, is the entire property in the flood zone, or just part of it? I'm asking because we're looking at a lot that seems to be 2/3 in the flood plain. We would of course build on the 1/3 that is not. Thanks, Mark

PokerMunkee · 03-28-2012, 03:01 PM

The bank finally approved HCIT Flood insurance, so the refinance should close in a couple days. Wooo!

FYI - I pay $750/year for HCIT to cover $240,000 for building and stuff. Even covers earthquake damage

The normal flood insurance could cost almost $3,000/year!

mydung617 · 07-12-2015, 10:45 AM

Hi,
So I'm at 6.25% and want to go refinance my house at a rate of 4.25%. I do pay flood insurance through FEMA. I want to know if I refinance, can I keep my old flood policy or are they gonna make me renew that to?

SmartMoney · 07-13-2015, 06:42 AM

Quote:

Originally Posted by mydung617

Hi,
So I'm at 6.25% and want to go refinance my house at a rate of 4.25%. I do pay flood insurance through FEMA. I want to know if I refinance, can I keep my old flood policy or are they gonna make me renew that to?

You should be fine. In most cases it will stay in place, in a few cases, the policy will renew at the table.

What many are finding since they purchased, FEMA redrew the flood maps that now includes many properties not previously in a flood zone. Much of their refinance savings is now going towards flood coverage. (There is a way to contest that, Google "elevation certificate)."