BUYING A HOME: OBTAINING A HOMEOWNERS INSURANCE
You are one step closer to acquiring your dream house, and you want to make sure it has substantial protection against any disaster or occurrence that can damage your abode.
This is possible through homeowners insurance. Also called hazard insurance, it protects a property against any damage due to earthquakes, fires, severe storms, or other natural events. Lenders normally require a buyer to purchase this coverage until the loan is settled. However, in some cases, a home is uninsurable. For instance, a home inspection reveals a huge water damage on the house. Insurance companies may refuse to write insurance on it, as they find too much risk on the house. On that note, walk out of the purchase contract.
If the property is insurable, the coverage may also shield you if someone gets injured while visiting your house and attempts to sue you. Secure an umbrella policy for maximum protection against lawsuits. This coverage picks up where your other insurances leave off, which can render a protection of more or less $1 million.
In an escrow process, if a hazard report reveals the property is located in a special hazard area, your lender may oblige you to obtain additional insurance, such as flood insurance. Like homeowners insurance, you need to pay for this coverage until the mortgage is repaid.
Aside from hazard insurance, this is a good timing buy life insurance for your entire family, if you do not have one. Purchase a policy enabling your family to pay the insurance for long enough to look for a seller or tenant, or to repay the house completely. You may want to consider disability insurance, which pays you monthly instead of in a lump sum in the event you are injured badly that you can no longer work. Social Security has certain overage in this situation, too, but not as much as an insurance coverage.
You have the option to choose the agent and insurance company you desire even though your lender or agent has recommendations. When selecting a company, make sure the entity has substantial financial strength and high customer satisfaction. And forget not to do your own research. Shop around and compare prices because rates differ depending on the firm.
If the down payment is lower than 20%, lenders may require you to create an impound account. It basically protects the lender. How does it work? When you give your monthly mortgage payment for the principal and interest, you also send in the monthly payment for any insurance, and the lender then forwards the payment to the firm. But if the down payment is higher than 20%, this account is usually optional, but it can be helpful if you often forget to pay your bills on time.
There are some instances your lender will require you to create an impound account, which also holds the lender reserves or the additional couple months’ worth of property tax payments and insurance premiums. You will pay this money when your loan closes. A down payment of less than 20% is considered high risk, so the impound account ensures the property won’t become uninsured or get a tax lien filed against it if you run out of money and stop giving your payments. The money in this account remains yours and you will get it back once you have finished paying off the mortgage. But bear in mind this account incurs interest at or close to the inflation rate, as the funds will be held there for several years.
Buying a Home: Closing the Deal
Ethical Investing: Environmentally-Conscious Investing
Ethical Investing: Its Advantages and Disadvantages
Ethical Investing: Niche Investment Style
Ethical Investing: Activism and Advocacy of Shareholders
Ethical Investing: Looking Into Ethical Investments
POPULAR FOREX DEFINITION
|01:01||Rightmove House Prices||Aug|
|12:00||Bundesbank Monthly Report|
|15:15||BOC Senior Deputy Governor Carolyn Wilkins Speaks|
|16:30||Leading Index (Conference Board)||Jun|
|17:00||FOMC Member Raphael W. Bostic Speaks|
|20:00||ECB's Jens Weidmann Speaks|
|00:00||RBA Governor Philip Lowe Speaks|