Home loans come with strings attached

Insurance Helpline with cedric Stephens Question: I insured my house in 2007 for a second time. The sum insured was $7.7 million. This was in order to get a bank loan. National Housing Trust (NHT) also insured it under a mortgage for $4,355,800. Hurricane Dean damaged the house. I claimed under the two policies. The adjusters assessed the loss. The repair estimate of $378,475 was prepared by my husband. The claim was settled for $147,359. NHT’s insurers paid $49,628.26.

The other lenders paid $87,730.74. What is the purpose of having two policies on the same property when the settlement cannot pay for the damage? Did both insurers have to collaborate? NHT refused to increase the insurance as the bank loan was not used for building purposes. How can I end up paying one premium so that in case of damage I make only one claim? - audreywallen_hanson@yahoo.com Answer: Insurers are not the ‘bad guys’ - at least not in this case. Blame the bank.

Like all loans, this one came tied with strings. Insurance was one. Neither the bank, nor the NHT for that matter, appears to have told you about the fine print in the insurance policies. Your claim was discounted by nearly 64 per cent because you were unfamiliar with the details of the coverage. As a result, you and your husband had to find nearly $250,000 to repair the house. That amount is two per cent of the house value.

Can this explain why both lenders gave it little or no attention when each loan was being closed? HOME EQUITY LOANS You got a home equity loan from the bank. Equity is the difference between the home’s fair market value and the unpaid balance on the mortgage. Equity increases as the mortgage is paid or as the value of the property rises. In this type of deal, the borrower uses the equity in the home as collateral. These types of loans are all the rage now.