Buying a home is a major investment. It’s not something that you want to leave vulnerable or unprotected. As much as people like to plan for the future, there’s no way to anticipate every possible event that could take place. Insurance exists to support you in the event of unplanned or unexpected trials. Here are a few types of coverage that you need to invest in after you finish shopping for homes for sale in Forest Hills, Tennessee.
Homeowners insurance is often called hazard insurance or abbreviated as HOI. Homeowners insurance is sometimes required by lenders before they will supply the funding you need to purchase your home. Even if you don’t have to have homeowners insurance, it’s still highly recommended that you purchase a policy. You’ll be covered against possible losses on your home that could result from natural disasters, theft, and other unexpected events. You’ll also get help with additional living expenses should you need to vacate your home temporarily after any of these events.
Private mortgage insurance (PMI)
Private mortgage insurance, or PMI, is typically required if the lender is paying more than 80 percent of the total cost of your home. Many home buyers, especially if they are purchasing a home for the first time, use a loan such as a FHA loan that allows them to purchase a home with a lower down payment. PMI protects the lender in these types of situations in the event that you aren’t able to make your payments while the outstanding balance is large. You can sometimes request cancellation after you make enough payments to get your equity in the home up to 20 percent. This amount is determined based on the original appraised value of the home when you first made your purchase. Don’t expect your request to be approved unless you have a good payment history with little to no late payments.
When you purchase a home, you’ll work with a title company to confirm that the seller is the only person with a legal claim of ownership on the home. They will do a thorough background check on the home’s history to determine if there are any liens, or claims of ownership, on both the home and the land. Although they do the best they can to check for anything that may present an issue down the road, it’s still a good idea to have title insurance in case anything comes up after closing.
Buying a home is a complicated process. There’s potential for a variety of different types of legal issues to come up along the way. This isn’t meant to scare you — this is simply the reality. You never know if you’ll have to deal with something unexpected such as a property line dispute or a battle with a service provider over what they can or cannot provide for you and for your home. Legal insurance will ensure that you are fully represented during any of these different types of disputes.
Although you may feel overwhelmed right now by all of this information, you will thank yourself down the road for taking the time to make sure you fully protected your investment. As you continue to think about shopping for a new home, David Hatef is the area's #1 expert. David is a trusted and experienced Forest Hills TN realtor. He takes great pride in walking with his clients through each step of the buying or selling process. He works hard to represent his clients with professionalism and respect from the initial contact all the way up until closing. Reach out to David when you’re ready to take the next step towards buying or selling a home in Forest Hills.