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Ten steps to home ownership series oklahoma mortgage bank - step 8

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It is silly to think of driving a car without insurance, so the same goes for owning a home. No homeowner should be without homeowner’s insurance. The main idea behind the different types of real …

It is silly to think of driving a car without insurance, so the same goes for owning a home. No homeowner should be without homeowner’s insurance. The main idea behind the different types of real estate insurance is to protect the owners if they find themselves in some type of unexpected tragedy. If something happens to go wrong, insurance can be the greatest decision ever made.

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  • 1. Oklahoma Mortgage (405) 586-0382 local Visit Oklahoma Mortgage Online: Nationwide Lender (800) 659-6732 toll-free www.OklahomaMortgageBank.comOklahoma Mortgage Bank’s Ten Steps toHome Ownership SeriesStep 8: Obtain InsuranceIt is silly to think of driving a car withoutinsurance, so the same goes for owning ahome. No homeowner should be withouthomeowner’s insurance.The main idea behind the different types ofreal estate insurance is to protect the ownersif they find themselves in some type of unex-pected tragedy. If something happens to gowrong, insurance can be the greatest decisionever made.What type and what is the cost?There are a few different forms of insurance related to home ownership, including the followingfour main types:Title insurance: This type of insurance is bought at closing with a one-time fee and protectshomeowners when the title to their property is found to be false or invalid. Title insurance in-cludes “lenders” policies, which will protect the buyer up to the mortgage amount of the home.Also, it includes “owners” coverage, which protects the owner up to the purchase price of theproperty. In other words, the mortgage value and the amount of the down payment are protectedby “owners” coverage.Homeowners’ insurance: Fire, theft, and liability coverage are provided under homeowner’sinsurance and lenders do require these policies. Surprisingly a number of different items can becovered by this type of insurance, such as wedding rings, home office equipment, and furniture.Flood insurance: The federal government issues flood insurance and can supply as much as$250,000 in coverage for single-family households and an additional $100,000 for contents. This Page 1
  • 2. Oklahoma Mortgage (405) 586-0382 local Visit Oklahoma Mortgage Online: Nationwide Lender (800) 659-6732 toll-free www.OklahomaMortgageBank.comPage 2 - Oklahoma Mortgage Bank’s Ten Steps toHome Ownership Seriesinsurance is usually required for homes in high-risk flood-prone areas. Speak with you realtor tofind out which locations require such coverage.Home warranties: If something goes wrong after the completion of a new home, buyers want theassurance that the builder will be available to them to make repairs. But what is the builder goesout of business or even refuses to do the necessary work?If the home warranty is bought by the property from a third party, several forms of protection aregenerally provided. These can include mechanical defects such as wiring and plumbing for thefirst two years, workmanship for the first year, and structural problems for as much as ten years.The home warranties for existing homes are usually bought by the seller and contain a one-yearservice agreement. The warranty company will make a repair or cover the cost of a repair in theevent of a covered breakdown of defect.Each insurance policy or warranty will have separate limitations and each individual program willhave different types of deductibles, coverage, and costs. Speak with a realtor, home builder, orinsurance broker today to find out all the necessary details.Where should you look?Home insurance is often supplied by realtors and insurance brokers also provide policies.How does one obtain insurance?The right time to get warranty coverage and insurance is at closing, so prior to closing make sureyou talk with a realtor or insurance broker. During your meeting it is important to ask about costs,limitations, deductibles, and “endorsements” (further forms of coverage that may be accessible toyou). Page 2
  • 3. Oklahoma Mortgage (405) 586-0382 local Visit Oklahoma Mortgage Online: Nationwide Lender (800) 659-6732 toll-free www.OklahomaMortgageBank.comPage 3 - Oklahoma Mortgage Bank’s Ten Steps toHome Ownership SeriesThis article was brought to you by Oklahoma Mortgage Bank. Oklahoma Mortgage Bank offers awide array of mortgage programs to eligible borrowers nationwide. If you or someone you know has questions about home financing in Oklahoma or nationwide, contact our Oklahoma mortgage team: (405) 586-0382 or (800) 659-6732. www.OklahomaMortgageBank.com Page 3

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