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I received an email from my loan officer today at Colonial Savings stating:
"US Bank (who will service your mortgage) is not accepting the deductible on
your homeowners insurance. They require that the deductible can't exceed
1% of the policy:
Homeowner's Insurance Policy provided for file shows deductible as $2500.
Deductible cannot be higher than $1000 or 1% of the face amount of the
policy and $2500 exceeds both of these amounts. Please provide a
Homeowners Policy with deductible corrected and if it results in an increase of
the yearly premium, we will also need proof of the additional premium paid
along with a new Payment Letter."
I don't like the idea of paying the difference out of pocket for a different premium than what was previously agreed to and was accepted by our loan provider. Am I obligated to follow through?
Thanks,
Shawn
What mortgage type?
FHA? I believe the max deductable is 1K.
@Anonymous wrote:I received an email from my loan officer today at Colonial Savings stating:
"US Bank (who will service your mortgage) is not accepting the deductible on
your homeowners insurance. They require that the deductible can't exceed
1% of the policy:
Homeowner's Insurance Policy provided for file shows deductible as $2500.
Deductible cannot be higher than $1000 or 1% of the face amount of the
policy and $2500 exceeds both of these amounts. Please provide a
Homeowners Policy with deductible corrected and if it results in an increase of
the yearly premium, we will also need proof of the additional premium paid
along with a new Payment Letter."
I don't like the idea of paying the difference out of pocket for a different premium than what was previously agreed to and was accepted by our loan provider. Am I obligated to follow through?
Thanks,
Shawn
Short answer: Yes, you are obligated to follow through.
Longer answer: read your note and your mortgage (two different documents). If your insurance doesn't comply, it is considered a default on the loan. I know it can seem strange, but what the lender is doing is protecting the collateral by making sure the insurance is adequate.
You can also shop your insurance, even if you have escrows set up with the lender. You choose the vendor under the terms required by the mortgage.
@JM-AM wrote:
Home Owners Insurance really isnt that expensive in my opinion. Now if you have major claims or live in a flood area, or something of that nature it does add to your premium.
Shop around and get a decent quote with a 1K deductible, I dont thing it will be a major increase from what you are paying now.
As mentioned yes you will have to get a new policy.
Movingfoward example of her Insurance is a decent guideline for cost for her home value.
It is very expensive in my area. Here in Florida it is very expensive. In fact, the average premium if you have a new home and live west of I-95 and have all the items to reduce costs like hurricane shutters etc - you can expect to pay $2000 to $2500 per year. For older homes it is more than double that amount and of course if you have an expensive home the price can be much, much more (these are for small, CBS type homes less than $250k). (These prices are not for forced placed insurance, which is substantially higher)
So anywhere else, the homeowners insurance is not really a factor - here in in S Fl it is a huge factor so we shop our policies here. OP didn't say where he/she is so I *assume* they aren't paying S Fl rates.
We have a big beautiful red fire hydrant right at the edge of our property line and I was told this is super groovy for insurance rates... lol.
the insurance companies know these things.... like how far is the fire station.