The appraiser will visit the home and compare it to other recently sold homes in a similar price range. Know what’s happening behind the scenes: Your lender will order a home appraisal to ensure that the value of the home you’re buying is in line with the purchase price. However, there’s usually an upper limit to the amount of coverage provided – be sure your coverage is sufficient if you have significant assets. Your homeowner’s insurance will generally cover you for accidents that happen to other people on your property, including medical care, court costs and awards by the court. If you choose not to replace your home when it’s destroyed, you’ll receive the replacement cost, less depreciation. This means that if your home is insured for $150,000 and it costs $180,000 to replace it, you’ll only receive $150,000. If your home is destroyed, you’ll receive money to replace it only to the maximum of your coverage, so be sure your insurance is sufficient. For example, many policies limit the amount paid for stolen jewelry unless items are insured separately. Even if you’re covered for a risk, there may be a limit to how much the insurer will pay.
For example, most insurance policies do not cover flood or earthquake damage as a standard item. Your lender will require proof of insurance before the loan can receive final approval.ĥ things to know about homeowner’s insurance Make sure to respond promptly to keep your application moving forward. At this stage, your lender may require additional documentation. If you applied and qualify for a mortgage, you’ll receive conditional approval. Remember: Every deal is different and negotiable.
When you receive the final report, prioritize the issues and decide whether you want to negotiate those items with the sellers. Note that a comprehensive inspection should not only bring defects and problem areas to your attention, it should also highlight the positive aspects of a home as well. If the home needs big repairs you can’t see, an inspection helps you negotiate with the current homeowner to have the issues fixed before closing or adjust the price accordingly so you have extra funds to address the repairs once you own the home.ĭuring the inspection, be sure to ask questions and bring a checklist of things you want information on. This step is especially important if you’re buying an existing home as opposed to a newly constructed home, which might come with a builder’s warranty. A home inspection is an added expense that some first-time homebuyers don’t expect and might feel safe declining, but professional inspectors often notice things most of us don’t.