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in Mortgage Data - 10 Dec, 2017
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Why Your Mortgage Lender Requires Home Insurance?

The one thing your mortgage broker will say to you is you need home insurance. Mortgage lenders absolutely require home insurance for any new buyer and yet despite this being a well known fact, a lot of people don’t think insurance is needed! The trouble is that lenders are not willing to take such a great risk when it comes to something happening to the home. So, why is home insurance needed for any home buyer today?

Covers You against Theft and Damage

Mortgage brokers Melbourne always advice clients about the need for home insurance simply because it’s a must-have for any buyer. Mortgage lenders are not going to offer a loan to any buyer unless they arrange for suitable home cover. Home insurance might not sound too important but it is. What happens if there are damages done to the home or you are burgled? How can you possibly afford to fix the home or replace the items missing when you have a mortgage to pay for? What is more, the value of the home can actually be affected because of these things. If you can’t afford to repay the home, the value will be decreased and no lender wants that.

It’s A Safety Net                                              

In a sense, mortgage lenders require any buyer to have home insurance simply because it’s their safety net against the worst. What happens if the home is completely destroyed how can you rebuild a home and pay a mortgage? It’s not possible. What happens if major repairs need done but you can’t afford them? That’s why home insurance is there as it can usually cover you against a host of problems. For lenders, it’s their safety net and that essentially prevents them from taking a loss. Any mortgage broker will say the same thing and you need to ensure insurance is there. This is a safety net for you too.

Insurance Is a Must When It Comes To Valuing the Home

Property values increase and decrease depending on the market as well as a variety of other factors but the actual condition of the home can make a difference to its value. If the home has become in a state of disrepair it usually means the value is far lower than what its original value was. It could mean the lender loses out and that’s just not acceptable to say the least. However, with home insurance, the necessary repairs can be carried out properly and safely which will make every bit of difference today. That’s why there is a real need to get home insurance. Mortgage brokers Melbourne knows this and most home buyers know it also. Having sufficient cover is a must and it’s going to help in many ways too.

Get Cover

Home insurance is an important factor for any potential buyer and while it might not seem overly necessary now, it will be in the future. Every lender wants to ensure their money is going into a solid investment and want to ensure they have a safety net too. It really is a must to ensure there is enough cover so that should the worst happen, you have insurance to cover you. Far too many people don’t think about this and yet it’s important to have. Ask your mortgage broker and they will say the same – you need sufficient home cover.