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Before Buying, Make Sure Home Is Insurable by Dian Hymer, The Times
For years, real estate agents have advised their clients to get pre-approval for a mortgage before they start looking at houses. Today, getting pre-approved for a loan may not be enough to prepare you to be a bona fide buyer. You also need to know that you're insurable.
Years ago, lining up homeowners insurance was one of the last things you did before closing a sale. Now buyers are finding that it's wise to make it a priority. Homeowners insurace is required to close any home purchase in which a new mortgage is involved. A mortgage lender will not give you a loan unless you have hazard insurance on the property. If you cannot get insurance, you cannot have the loan.
Very few purchase contracts currently include insurance contingencies that make the purchase contingent on the buyer's ability to obtain acceptable homeowners insurance. But that situation could change, given conditions and industry.
Homeowners insurance carriers have recently been hit with skyrocketing costs [and thus are becoming] hyperdiligent about who they will insure and what properties they will insure. For years, insurers have scrutinized applicants to make sure they were a good financial risk - checking credit reports and scores. Now they also look at your claims record to see if you're a good insurance risk.
Insurance carriers are also checking out the property to make sure its claim record is clean before they will agree to write a policy. This means that you could have a squeaky-clean record, but you could be denied insurance if a claim or two has been filed in the last five years on the property you are attempting to purchase...
In closing: If your purchase contract doesn't include an insurance contingency, find out if the house is insurable at a price you can live with before you remove your inspection contingency. You can probably find insurance to cover a home with a negative record, but the cost may be prohibitive.
Contact us for more information.
For years, real estate agents have advised their clients to get pre-approval for a mortgage before they start looking at houses. Today, getting pre-approved for a loan may not be enough to prepare you to be a bona fide buyer. You also need to know that you're insurable.
Years ago, lining up homeowners insurance was one of the last things you did before closing a sale. Now buyers are finding that it's wise to make it a priority. Homeowners insurace is required to close any home purchase in which a new mortgage is involved. A mortgage lender will not give you a loan unless you have hazard insurance on the property. If you cannot get insurance, you cannot have the loan.
Very few purchase contracts currently include insurance contingencies that make the purchase contingent on the buyer's ability to obtain acceptable homeowners insurance. But that situation could change, given conditions and industry.
Homeowners insurance carriers have recently been hit with skyrocketing costs [and thus are becoming] hyperdiligent about who they will insure and what properties they will insure. For years, insurers have scrutinized applicants to make sure they were a good financial risk - checking credit reports and scores. Now they also look at your claims record to see if you're a good insurance risk.
Insurance carriers are also checking out the property to make sure its claim record is clean before they will agree to write a policy. This means that you could have a squeaky-clean record, but you could be denied insurance if a claim or two has been filed in the last five years on the property you are attempting to purchase...
In closing: If your purchase contract doesn't include an insurance contingency, find out if the house is insurable at a price you can live with before you remove your inspection contingency. You can probably find insurance to cover a home with a negative record, but the cost may be prohibitive.
Contact us for more information.
Adams & Associates
La Jolla, Del Mar, Rancho Santa Fe, San Diego Homes
Coldwell Banker - La Jolla Branch
Bus: (858) 456-3256 | Fax: (858) 729-0652
Office: 930 Prospect Street La Jolla CA 92037
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