| Mortgage help: pay off with a home equity loan?? |
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Mineya
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| Mortgage help: pay off with a home equity loan?? |
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 My mortgage company is now requiring that I carry flood insurance EQUAL to my homeowners insurance! The premium is $2,061.00 per year for $229,000.00 of coverage. I only have 40 months left on this 15 year, 8.375% mortgage, but this insurance requirement is outrageous. I was considering getting a Home Equity Line of Credit to pay off the mortgage. I would save about $6,800.00 in Flood Insurance premiums. Other lenders may still require Flood Insurance, but only equal to the amount of my principal. Is this a good solution? Or should I just keep my mortgage with this stupid requirement?
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Wed Aug 18, 2004 2:26 am |
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Andrew
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Location: Texas
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That sounds pretty expensive.
I'd shop around for some better quotes. Where do you live? Is it in a high-risk flood zone?
I found a quote that indicates that the average flood policy is $300 a year...
quote:
The average flood policy premium is around $300 per year. Low-risk flood zone areas may be able to acquire flood insurance for a little more than $100 a year. Some insurance companies will insure higher risk Coastal Barrier Resources Areas but instead of the $340 or so in premiums offered through the government program, they may charge $3,000 or more per year for flood coverage of a home slightly less than $200,000.
http://www.propex.com/C_f_env_fldcost.htm
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Wed Aug 18, 2004 4:06 pm |
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sagetips
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| HELOC is a Sound Idea |
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With just 40 months remaining on a 8.375% mortgage, I'd say refinancing with a low-interest, no fee HELOC is a no-brainer. You can still find HELOC's under 4%. Even if rates continue their rise, you'd reap plenty of savings before they got up to 8.375%.
I'm not sure about the flood insurance premium but I do know that plenty of people get burned big time without it. Shop around for a better premium, but I wouldn't go bare.
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Sat Aug 28, 2004 12:45 am |
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REI Houston
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Location: Houston, TX
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About 90% of the time, flood insurance comes from the government and your agent is just the go-between. Definately check around. Also, see if you were recently classified in a 15 or 20 year flood plain (as opposed to a 100 yr flood plain). I know that in Houston Texas, the government has gone through and redrawn the maps.
Jerel
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Fri Sep 03, 2004 10:00 pm |
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