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| Rates | Calculator | Get Approved Now! | Amortization | APR | Contact Us | August 27, 2008 5:07 PM Pacific Time | |||
Homeowners Insurance ExplainedDefinitionHomeowners insurance protects both the owner and lender against loss due to fire, flood, or other natural disaster. Amount of Coverage Lenders want coverage to meet the lesser of: the loan amount or the replacement cost of your home Replacement Cost The replacement cost of your home is easily determined, as it is estimated on the property appraisal. Remember, this replacement cost is often less than your loan amount. As the insurance company will only reimburse you for the actual cost of replacing damaged property, there is little need to carry more coverage. You do not need to have coverage in the amount of your loan, if your your loan exceeds the replacement cost. Your Premium Your insurance premium is based on the amount of policy coverage, and the rates set by your insurance company. Lenders estimate the cost of your premium - you are free to find the most competitive insurance premium available. Buying or Renewing Your Policy You must provide proof of insurance if you are purchasing a home. If refinancing, the lender will require that there be at least six months remaining on your policy, counting from the 1st mortgage payment due. Your insurance agent will work with you and the escrow officer or closing agent to provide the proper evidence of insurance. Flood Insurance Flood insurance is required if your property is located in a flood zone as mapped by the Federal Emergency Management Agency (FEMA). Earthquake Insurance In most cases, earthquake insurance is not required. Condominiums Condominium associations carry a Master insurance policy which covers all of the living units. Evidence of this policy is sufficient to the lender, and is usually provided by the Homeowners Association representative. There is no requirement that six months of coverage remain on the policy at the time of loan funding. |
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Equal Housing Lender. Copyright 2007 Mark Leaver. All rights reserved. Terms and Conditions of Use. Read our privacy statement. CA Department of Real Estate, Real Estate broker. Rates appearing on the Loanlane web site are intended for California owner occupied single family residence only. The information contained herein is believed to be reliable. However, we do not make any representations as to its accuracy or completeness. Any statements nonfactual in nature constitute only current opinions, which are subject to change. Mortgage rates are subject to change without notice. Mortgage rates posted on this web site apply to applicants with a minimum FICO score of 720 or a loan-to-value ratio less than 60%. Stock quotes, if displayed, are delayed 20 minutes. Stock quote data and market index information is provided for information purposes only, and is not intended for trading purposes. Loanlane is not liable for any errors or delays in the content, or for any actions taken in reliance thereon. |