Home Insurance Awareness: What Coverage Do You Need When Buying a Home?
Being aware of home insurance is fundamental when it comes to buying a house. Home Insurance goes hand in hand with your mortgage, but how do you know what you need? There are several kinds of insurance, so let’s take a closer look at what you need to consider.
Homeowners’ Insurance
Probably the most essential insurance coverage you can get when you buy a home is homeowners’ insurance. It protects your home from damage or theft, and it’s required by almost all mortgage lenders to qualify for a loan. You can learn more about homeowners’ insurance here.
Hazard or Fire Insurance
While homeowners insurance covers many aspects of damage to the property, it doesn’t cover everything. That’s why many home buyers are choosing additional coverage such as hazard or fire insurance. If a weather event is covered in the policy, damage from nature will be covered. Also, consider that homes in flood plains may require flood insurance as well.
PMI
Private Mortgage Insurance, also called PMI, is often required if you have a conventional home loan. PMI is generally arranged by your lender and will protect them if you cannot pay for your mortgage. There are several options, and PMI isn’t always required, so always talk to your lender about what you need.
Title Insurance
Another type of insurance often required when you purchase a home is title insurance. When you receive the deed, legal ownership, or the “title,” transfers to you. It protects you if anyone indicates they have a claim against the home and sues before the purchase is complete. Common claims can include situations where the previous owner failed to pay taxes or contractors for work done on the house.
Legal Insurance
Here’s one you may not think about but could come in handy in the future. Legal insurance is sometimes called Pre-Paid Legal Services. It’s often lumped into the insurance category, but it’s a discount plan for future legal services. However, it can be helpful because you never know what kind of legal challenges you may face in the future. Some employers offer these types of plans, so you may want to check with your company.
We know Insurance Awareness isn’t the most exciting topic, but we hope we’ve given you some information you can use to help you when you’re buying a home.
GoPrime is not licensed to sell insurance. Please consult a licensed insurance agent. Do you want to know more? Call GoPrime Mortgage in West Asheville today.
Do you want to understand the mortgage process better and get preapproved for your next home purchase? Call the team at GoPrime Mortgage today. GoPrime Mortgage in West Asheville is here to help. Call us today at 828-348-1907 –Zachery Adam at GoPrime Mortgage in West Asheville.
