Posted on: 25th Jun, 2010 03:52 pm
In Delaware, can the mortgage company require me to carry homeowners insurance for the amount of the loan even though the value of house is lower than the loan amount?
For example, the house I'm buying is worth $105,000 but the loan amount will include demolition of existing home, new foundation, and closing costs. Do I have to insure for total of loan amount of $130,000?
Maryland law will not allow the morgage company to require the higher insurance amount, does Delware?
For example, the house I'm buying is worth $105,000 but the loan amount will include demolition of existing home, new foundation, and closing costs. Do I have to insure for total of loan amount of $130,000?
Maryland law will not allow the morgage company to require the higher insurance amount, does Delware?
As far as I know, the homeowner's insurance should be worth the value of the property. With the demolition of the existing home and a new foundation, the property value will change and I guess you need to insurance the whole amount. You can contact your insurance agent and he will help you in getting the correct information.