(This article originally appeared in the April 2016 edition of Dream Builders Realty's newsletter to Kissimmee, FL residents.)
When clients of mine are purchasing a home, their number one concern is cost. That is understandable, since most home buyers are trying to qualify for a mortgage, and insurance can ruin a home purchase in a hurry! I have compiled some things to look out for when shopping for a home that could potentially kill your purchase due to cost or even qualification of insurance.
How old is the roof?
The age of the roof is becoming more of an issue with insurance companies. While I do work with a few companies that will take a roof that is older than 15 years, most companies will not, which means I will have a more difficult time getting competitive prices for your new policy. When shopping for the lowest insurance premium, it’s best to be working with a newer roof.
What brand are the breaker panels?
If the home you are looking to purchase was built before the mid-1980s, you should be looking at the breaker boxes in the home. If the breaker panels are Federal Pacific or Zinsco panels, your insurance options will be limited drastically! I know of one company that writes homes with those panels, and it typically costs between 50% and 100% more than a home with other brand panels.
Is the home in a high-risk flood zone?
Most mortgage companies will require you to purchase flood insurance if the home is in a high-risk flood zone. I have seen this stop a few home purchases from happening. While, for the most part, flood insurance isn’t expensive in Osceola County, it can still end up killing your home purchase if your loan qualification is tight. Pulling the flood zone for a property is simple – your insurance agent can pull it very easily for you for free!
At Harrell Agency, we always emphasize the quality of insurance over the price, but we understand that sometimes pinching pennies is necessary. The above issues might not pose a problem for you and your situation, but now you won’t be blindsided if you end up paying a little bit more than you budgeted for homeowners insurance on your new home.