When you purchase a home, it’s crucial to ensure that you have the right insurance to protect your investment. However, if you’re financing your home purchase, remember that mortgage lenders are also trying to protect their investment. As such, many mortgage lenders will have certain conditions you need to meet to qualify for funding, such as having homeowners insurance. But what about separate forms of insurance like flood insurance? Can lenders require that? Let’s explore insurance conditions in lending contracts. Once you have a solid understanding of what lenders can require, come to us here at Baldo-Downs Insurance LLC in Tuscaloosa, AL to find the best flood insurance policy for your new home.
Can My Lender Require Me to Get Flood Insurance?
If you live in an area that’s at risk of flooding throughout the year, your lender may add a condition in your mortgage agreement requiring you to have flood insurance to release the funds for your home purchase. Ultimately, this benefits you as you will have less to worry about should your home get flooded and suffer from flood damage. From the lender’s perspective, this added condition ensures you have the financial support needed to pay for any damages to your home and continue paying your mortgage. Otherwise, you could end up falling behind, and they won’t get their investment back. It’s a mutually beneficial agreement, even if it seems like it’s just more bills to worry about when you purchase your home.
Shop for Flood Insurance Today
We at Baldo-Downs Insurance LLC in Tuscaloosa, AL, streamline the flood insurance shopping experience so that you can easily find the perfect policy. Compare quotes with us today!
