Homeowners Insurance and VA Loans
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.
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 under-insured 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.
If a property is purchased that is in a "Special Flood Hazard Area" flood insurance is required by the lender and the VA.
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 resource.
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.
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.