| This is the
seventh in a series of tips on buying and selling real estate: Everybody needs to insure their home - but some people actually over insure it. As the land on which a home sits won't burn, only the building must be insured. If the amount outstanding on your mortgage is less than the value of the building, there's no problem. But if the balance owing on your mortgage exceeds the value of your home, insuring the mortgage amount means you're over insuring the building. Insurance coverage should be determined by the value of the building - not the size of the mortgage. One way to avoid this dilemma is by having a "replacement cost endorsement" for the building appear in your insurance policy. Replacement cost coverage guarantees that the insurer will pay the full cost of rebuilding the home, even if the loss is greater than its insured value. This endorsement is available at nominal - and sometimes at no additional - cost. But it's limited to owner-occupied homes, not income-producing properties. And don't forget - your fire insurance must be in place at the time of closing. Tip No. 1: Buy First Or Sell First? Tip No. 2: The Advantages Of A Resale Home Tip No. 3: The Marketing Plan Tip No. 4: Getting Interest On Your Deposit Tip No. 5: What Are The "Usual Adjustments"? Tip No. 6: Insuring Your Mortgage Tip No. 8: Choosing A Lawyer Tip No. 9: The Offer To Purchase Tip No. 10: Home Inspections Tip No. 11: Surveys Tip No. 12: The Counter Offer Tip No. 13: Conditional Offers Tip No. 14: Why Buy A Brand New Home? Tip No. 15: Deposits - A Vital Part Of Every Deal
|
