Buying a home can be a very exciting experience for any family. You look for the right home, get the loan you need from a VA approved lender
and get a guarantee on your loan from the VA through the Home Loan Program. One of the most important things regarding the purchase of your new home is insurance. Since buying a home is a large investment, you need to protect your property against any accidents through home owner's insurance.
When you obtain a mortgage on a home, the lender requires home owner's insurance to protect the value on the property. This way if something does happen that would damage the home or property and lower the value, the insurance would pay for the property to be restored to its original value. Lenders require this so that they know the property value will never drop below the amount they loaned you, so no matter what they will get their loan money back. It is also important to you because you make monthly mortgage payments as an investment in equity. When you build equity in your home you are building personal wealth.
If you don't have proper insurance coverage on the home you can lose your investment. If the coverage you have is under the current value of your home the mortgage company will recapture the amount of your loan balance and their may be nothing left. Make sure you are not underinsured by raising your insurance coverage limits whenever the value of your property increases with the real estate market.
For those people who live in certain areas of the country where natural disasters are more likely to occur, additional insurance may be required. Normal home owners insurance does not usually cover floods.
If a property is purchased that is in a "Special Flood Hazard Area" flood insurance is required by the lender and the VA. The VA also requires home owners insurance and flood insurance in these special areas because they want the property to maintain its value so that the mortgage loan company never has to collect the loan amount the VA guarantees.
Are you wondering how to find out if you need flood insurance? The NFIP, National Flood Insurance Program, designates the flood hazard zones across the United States. The NFIP is a branch of FEMA, the Federal Emergency Management Agency, and they offer flood insurance to areas where floods are most likely to occur.
To find out if your property or the property you are interested in purchasing is in a flood hazard area and requires flood insurance visit Flood Insurance Information
Here you will find all the information you need to determine if a flood is likely to occur in the area you are inquiring about.
If you click on "What's Your Flood Risk?" you can enter the exact address where you live or are planning to buy, and the NFIP can tell you if there is a possible flood hazard there or not.
They can also get you in contact with a NFIP agent that is nearest to you in case you have questions or need to purchase flood insurance.
At this website you can get an estimate on your flood insurance premium costs.
You can also go to Government Flood Site
to find out more information on the flood insurance requirements for the VA Home Loan Program. Make sure you have all the information you need to have the proper insurance coverage to protect your home.