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Whenever you decide that you want to buy a new home, you will most always be required to purchase home insurance by your mortgage lender. Home insurance doesn’t just protect your mortgage lender, though; it helps to protect possibly the biggest investment you will make in your entire life. In this article, we want to explain to you the basics of home insurance, as well as why it is an absolute necessity to protect both you and your family. 

What Is Home Insurance?

First thing you need to know is exactly what it means to insure your home. Home insurance has a dual purpose - the first thing home insurance does is give your mortgage lender the peace of mind that if something unthinkable should happen to you, they will still be able to recoup their investment in your home. In fact, the majority of lenders require you to carry a home owner’s insurance policy on your home for either the duration (term) of the loan, or for the full amount (whole) that they loan you. Most insurers will allow you the opportunity to take out a policy that will completely pay off your mortgage in the event something should happen to you. This allows you the peace of mind of knowing your family won’t lose their home should the unthinkable happen.

The second purpose for having a home insurance policy is to protect you and your family from the unexpected events which life has a nasty habit of throwing at us. When you carry a home owners insurance policy, you can rest assured that you won’t have to incur any large out-of-pocket expenses in the event of a flood, fire, or some other sort of natural disaster. You can also include the contents of your home in your insurance policy, so that if you ever find yourself robbed, you can easily replace any valuables which may be taken.

Types Of Home Insurance

There are actually a number of different types of home insurance policies you can buy. Your insurance agent will be able to help you decide which is actually the best for your situation; but for the most part, they are as follows:

ï Limited Liability - The bare bones minimum that you will be required to have by your lender;

ï Extended Homeowners Insurance - This coverage covers more possibilities than basic coverage, including flood and hail damage;

ï Condo Coverage - Special home insurance for condominium owners; and,

ï Historic Coverage - This type of home insurance is for those with older homes which may fall under historic protection laws.

A trained home insurance professional will be able to help you choose the best type of policy for your home, your needs, and your current budget.

When it comes to owning your own home, there are a great many things that change in a person’s financial life. From keeping up with maintenance and taxes, to the various forms of home insurance available. Without fail, every mortgage lender in the country will require that you carry at least a basic home insurance policy, in order to protect their investment. Although you can certainly stick with the minimum required, it is important to keep in mind that this is your investment too - perhaps the biggest you will ever make - and you want to ensure that you and your family are protected as well.

Choose the right amount of coverage for your needs -

The first thing you need to take into consideration when looking to purchase a new home insurance policy is just how much you and your family would be able to comfortably replace in the event of an unforeseen disaster; or, if you have a policy that covers your payments in the event of a lack of funds, how long you would be able to survive if your only source of income suddenly disappeared? If the answer is “not long” then you should probably consider getting a larger policy than your lender requires. 

Where is your new home located? 

Another thing to take into consideration is the area in which you are buying your new home. Different types of home insurance cover different types of situations, so it is important to know that the policy you choose will cover every possible contingency. A good example of this is the optional flood insurance that most companies offer. Many people don’t necessarily consider their home in a flood zone, and thus opt out of purchasing the additional coverage. However, if recent years have taught us anything, it’s that floods don’t always come when - or where - we expect. If the area you are in has even the slightest history of flooding, even if it has only been a few flash floods during freakish storms, you will want to consider making sure you’re covered. In some areas, not having the additional home insurance isn’t an option; and mortgage lenders will require you to carry the additional coverage.

Choose the right insurer -

Last but not least, it is important for you to make certain that the insurance company you’re dealing with has a long and verifiably trustworthy history. It is important to compare several companies side by side when shopping for your new home insurance. Make certain that each company you’re looking at carries the types (and amounts) of coverage you need, and that each has a long line of satisfied customers.

Finding the home insurance you need doesn’t have to be a difficult process if you just take the time to assess your needs thoroughly, and to investigate any company you are considering to purchase home insurance through.

When it comes to buying foreclosed properties, there are a few things you should know. Since buying bank owned homes isn’t exactly the same as purchasing a new home through a realtor, you are doing yourself a favour to become informed about the proper process for buying foreclosed real estate. In this article, we want to give you a short “how-to” guide on buying bank owned property, as there are a few things you need to know in order to make the process as simple as possible.

What Is Bank Owned Property?

First and foremost, you need to understand that buying bank owned real estate, or REO as it is more commonly referred to (Real Estate Owned), is unlike any other home buying experience. For starters, you don’t have any of the guarantees with REO that you would when purchasing a new home through a realtor - mainly because these homes are those which have failed to sell in a foreclose auction, and thus reverted back to the bank. Banks are eager to unload these homes because, quite frankly, they are not in the real estate business and have no desire to own property. Because of this, you can usually pick up a bank owned home for about 30% less than you would be able to buy it on the open market.

Buying REO

The first thing you need to do when buying a bank owned home is to find an REO listing agent. These are a special type of real estate agent that deals only with bank owned property. The number one reason why you want to stick with one of these specially trained REO agents, is because they will have the experience necessary to make sure you get a house that not only fits your needs, but that doesn’t have repairs which are going to be out of your budget to fix. Additionally, these agents can typically negotiate a better deal with the bank for you, than you would be able to find on your own.

A few tips that you should keep in mind when you opt to purchase bank owned real estate:

ï Hire a buyer’s agent who has no connection to the bank in question

ï Never try to negotiate directly with the bank yourself, always let your agent do so

ï Don’t be afraid to turn down a counter offer

ï Look for homes which the bank has owned for a long time - the longer the better, as you will be able to negotiate a better price.

Remember, buying a bank owned home is a great way to purchase either your first home or to purchase investment property. Make certain that you have an agent working on your side when you talk to the bank, and your next home could be a bank owned property.