realestate
Real Estate

Hazard Insurance & Homeowners Insurance

Wed Apr 16, 2008 5:45 pm
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Homeowners insurance sometimes known as Hazard insurance is required by all lenders on any property that they (the lender/mortgagee) have an interest in.

There are some conditions that would apply to securing this type of insurance. Some major carriers will not insure real property in areas such as Florida, Alabama, Mississippi, etc. In these areas Hurricanes are the major reason some insurance cariers will not write coverage.

The cost for a Homeowners Policy will vary from as little as a few hundred dollars per year to as much as a few hundred dollars per month.  This is a reason for being prudent when looking to purchase any real property. The cost of insurance may preclude the purchase of  home simply due to the fact it may put the borrower outside the ratios for mortgage approval.

Regarding the settlement/closing process the insurance carrier will require full payment at the time the binder is approved. In addition the lender will most likely require another  full years payment in advance as a prepaid at settlement/closing. 

 



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