Insurance Amount and Land Value
I read something in a landlording book, but I am not sure if it applies in the “real world” of Brooklyn. House Price = 800 K Mortgage = 700 K The mortgage company is certainly interested in me getting enough fire insurance. But land does not burn ! The book said if the house is…
I read something in a landlording book, but I am not sure if it applies in the “real world” of Brooklyn.
House Price = 800 K
Mortgage = 700 K
The mortgage company is certainly interested in me getting enough fire insurance.
But land does not burn !
The book said if the house is worth 600K without the land, then I should only have to get 600K fire insurance.
But my mortgage company is not buying this they blindly insist on 700K .
Is this a battle I have a small chance of winning?
Should I be switching mortgage companies?
Many thanks!
Careful with the above advice. Some policies are multi-year – check the cancellation penalties.
i would just let it go for now, just to facilitate the closing. after you close, shop around for a new insurance carrier. you will get back any pro-rated premium you have already paid, so it’s not a big deal.
I had the same issue and was told “that’s the way it is”. It’s not really that big of a deal, be happy you can get insurance. The extra insurance on the excess is not that expensive. It’s not a mortgage broker’s issue, it’s the bank’s.
My house is only insured for the cost to replace the structure, which is about half of the value of the house. My mortgage company doesn’t have a problem with it.