Homeowners Insurance
This insurance covers replacement costs for damages caused by fire, wind or other disaster that might affect the value of the property. Typically, the insurance also includes personal liability and theft coverage. You are required by the terms of the mortgage to carry this type of insurance on your property as long as there is a mortgage against it.
Flood or Quake Insurance
Additional hazard insurance coverage is required for homes located in a designated hazard zone as established by the Federal Emergency Management Agency (FEMA). As we tour houses, I will let you know if the property resides in a hazard zone so you will be aware of you will need this type of insurance.
Private Mortgage Insurance (PMI)
This is insurance required for any conventional mortgage loan when the borrower’s down payment on the house is less than 20 percent of the loan value. It is also required on FHA and VA loans for a minimum of 5 years as long as the ending LTV is less than 78%.
Title Insurance
This policy protects both the buyer and lender by insuring a clear chain of title. In other words, it insures that the person who sells the house has the legal right to do so.
Check out the facts about loan related closing costs. It is a good idea to be informed when buying a home.
