VA Loans and Homeowners Insurance
If you have the VA home loan benefit available to buy and finance your next house, you already know how much you can save. VA loans don’t require a down payment and closing costs are lower compared to other low down payment mortgage programs. Your approval will be based upon a variety of factors primarily your income and credit but the lender will also want to make sure the property is marketable, in good condition and is insured. What are some of the things you need to know about VA loans and homeowner’s insurance?
The VA lender will not only require you to have a full year’s insurance in place at the closing table but will also require a minimum coverage. The property is the lender’s collateral and should disaster strike the lender wants to be protected should the asset be damaged and the minimum coverage is at least for the loan amount. Insurance policies will vary but this is the primary requirement for VA lenders and all mortgage companies as well.
When getting quotes for insurance, you’ll like start out with the insurance agency you’re currently with, such as the agency who writes the policy for your automobile. Carriers give discounts when you have multiple policies. You can also get discounts for having smoke alarms, fire sprinklers and burglar alarms installed. Do you live next to a fire hydrant? Discount. Don’t have a dog? Discount. Some insurance companies provide discounts that others do not.
And since a lower premium also lowers your monthly payment, ask about adjusting your deductible higher in order to obtain a lower premium. Make sure you fully understand the tradeoff between a lower premium and a higher deductible. You want a low premium but you also want to be fully covered and able to afford the premium when an insurance claim is made.
