Wednesday, July 2, 2014

What Happens When You Go Without Homeowner's Insurance

Many people view homeowner's policy with disdain, not only because of the additional cost but because they aren't sure what it covers. Yes, it is something required by lenders, but it isn't only for their benefit. If you do not have homeowner's insurance your lender has the right to purchase it for you, so stay ahead of the curve and do your research. The following article explores what happens when someone doesn't have homeowner's insurance.

By not having an insurance policy, you’ve put yourself and the lender at unnecessary risk. If you want to be mad at someone, be mad at yourself for not complying with the legal agreement you signed. As for your escrow account being negative, the lender has the right to require you to keep enough cash in that account to cover your property taxes and insurance premiums. Your mortgage will go up every month until it not only covers the expense, but there is a two month cushion in addition to the basic costs.

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