by bryansharp33 » Wed Aug 26, 2009 02:30 pm
I owe more than what my house is worth and more than what it would cost to build. Would my mortgage company require me to insure my home for the amount of mortgage debt?
Posted: Thu Aug 27, 2009 11:32 am Post Subject:
They should require you carrier a min. of the loan balance.
Posted: Sat Oct 17, 2009 02:50 am Post Subject:
It depends on the state. In CT for instance you cannot insure the land which is part of the appraisal that one uses to determine a selling price or mortgage amount. The mortgage co cannot force you to cover a home to your loan balance only enough to rebuild the home.
Posted: Sat Oct 17, 2009 03:12 pm Post Subject:
The amount the insurance pays has nothing to do with your loan and what you owe. Usually HO insurance pays the replacement value of the home (if replacement cost is specified in the policy).
Most banks won't loan more then 100% then the value of the home, certainly not more then 100% then the replacement cost of the home. Usually a bank won't give a loan against the home for more then it's worth. Are you sure you understand that "replacement value" is what it would cost to build a brand new comparable home?
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