While a homeowner in Florida is not required by Florida law to purchase home insurance, a person who has just taken out a mortgage will likely find that the mortgage holder will have certain requirements in regards to home insurance. The requirements are pretty much the same no matter what mortgage lender a person works with, although there are some variations from lender to lender.
A person who is taking out a mortgage to buy a home should also consider the costs of home insurance for the house itself; property insurance is not necessary in this case. The mortgage holder will simply want to make sure that the person who is buying the home has coverage should the home for any reason sustain damage or loss of value. A new homeowner may need to hire a contractor to evaluate what the value of the home is; the contractor’s evaluation will then need to be verified by the bank that holds the mortgage.
Mortgage lenders will also want to know about the insurance policy’s deductible. The deductible, simply put, is the amount of money that a homeowner will need to pay on his or her own should damage occur to the house and/or the property. While it is expensive to purchase a policy that has a low deductible, in many cases banks will have a policy on what sort of minimum deductible is acceptable. On the other hand, a person who is buying a home should look over his or her finances carefully and make sure that he or she can pay for damage done to the house that will not be covered on the insurance policy that is being taken out.
Additional interests is another section of a home insurance policy that a bank will be very concerned about. In fact, if this part of the home insurance policy is not worded in accordance with the bank’s policy in this regard, the bank will not accept it. One should consult the bank before taking out a home insurance policy and request the bank to give the proper wording for this aspect of the home insurance policy.
When taking out Florida home insurance on a new house that is being purchased, it is important to do the research and take out a policy that is affordable, suitable and that meets the mortgage lender’s standards. This will make the final paperwork for closing the sale of the house a lot simpler and easier. A person who is unfamiliar with home insurance should consult both the mortgage lender and a competent home insurance policy holder in regards to what sort of home insurance policy would be the best option and agreeable to the lender.
