Building a house – credit and insurance

Posted: August 15th, 2013 | Author: | Money

Taking a loan for an apartment, we can expect that in addition to the margin, interest and similar charges we will have to face yet another expense. It is, of course, insurance against fire and accidents, the payment which will be required for the entire term of the loan. While buying a home this procedure is simple and the property must be insured from the moment it enters into its possession, building your own house is more complicated.

w4nd3rl0st (InspiredinDesMoines) / photo on flickr

w4nd3rl0st (InspiredinDesMoines) / photo on flickr

It is difficult to describe clearly what the requirements of banks in this case, because according to companies they differ almost completely. It should however be borne in mind when and what insurance is required when building a house on credit. It may turn out that the lower interest rate loan will be much less cost-effective solution if such a competitor insurance will be required before we carry out half of the investment or the house has been restored to the raw state, while another bank may require us insurance at the start, which means sometimes that already casting the foundations we have to pay the insurance premium in the amount, if our house was already built.

This brings us to another issue, namely the amount of insurance. Here, the banks also have their own requirements, but sometimes you also need to think about the security of your own interests. This refers, of course, to a common approach to the requirements of the banks, when the amount of insurance require paying a minimum given us credit. In such a situation, in case of an accident you will receive funds to cover the debt, but you will receive almost no compensation for the loss.

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