Pre-approval May Not Always Be Enough…
Oct 24, 2007
Author: Family Realty LLC

For years, Realtors® have advised their clients to get pre-approved for a mortgage before they start looking at houses. Today, getting pre-approved for a loan may not be enough to prepare you to be a buyer. You also need to know that you’re insurable.

Years ago, lining up homeowners insurance was one of the last things you did before closing a sale. Now, buyers are finding it’s wise to make it one of the first priorities.

Homeowner’s insurance is required to close any home purchase. A mortgage lender will not give you a loan unless you have insurance on the property…if you can’t get insurance, you can’t get a loan.

Very few purchase contracts presently include insurance contingencies that make the purchase contingent on the buyer’s ability to obtain acceptable homeowners insurance. But, that situation could change, given current conditions of the insurance market.

Homeowner’s insurance carriers have recently been hit with sky rocketing costs due to an increased number of claims. In effort to control costs, carriers have become hyper-diligent about who they will insure, and what properties they will insure. For years, insurers have scrutinized applicants to make sure they were a good financial risk; checking credit reports and credit scores. Now, they’re also looking at your claims record to see if you’re a good insurance risk.

So, call your local insurance carrier…you don’t want insuring your dream home to become a nightmare.