California's rapidly changing Landscape for Insurance & Mortgage
In recent news, State Farm and All State have begun pulling out of California (for homeowners policies), and so insurability has impacted many real estate transactions. Since getting a mortgage will require a homeowners policy, offers from buyers should include insurability as a part of the inspection contingency.
As a ripple effect, expect the remaining insurance companies to respond by tightening their underwriting and raising premiums. While California home insurance premiums are in the middle of the pack nationally, we should expect this to begin challenging HOA policy renewal, start seeing these larger deductibles and/ or limitations on special coverage. As different homes may have different coverage needs, such as being near a flood zone, you may be required to add flood insurance coverage to your policy. Even if the lender doesn’t require buying homeowners insurance with flood coverage, you might need to consider that. Once you’ve found a policy that’s suits your property, check that it meets the requirements of your lender.
In the midst of the frenetic pace of our local real estate market, there has been a quiet change happening behind the scenes: Home mortgage interest rates have been creeping up, and there are things you should do to protect yourself. If you’re getting ready to write an offer on a home, be sure that the rate you’ve been quoted on your pre-approval letter is still valid. Consider all loan options. Shop around; not all lenders are quoting the same rates or offering the same packages. This is especially true when it comes to taking RSU’s and other equities into account. Many lenders will offer you a much better rate if you move a significant portion of your money to their institution too. If you’re not sure who to call, feel free to contact me. I have a list of great local lenders that I’m happy to put you in contact with. Proper guidance is essential for real estate success, so be sure to get in touch if I can be a source of information for you or your family, friends, and colleagues.