Buying a home is the single largest purchase most folks will make in their life time – yet many go into it blind. In my previous career of a mortgage loan officer I saw this more times than I would like to admit.
Here is the 6th of six biggest mistakes homebuyers make according to cnnmoney.com;
Not budgeting for insurance
Don’t underestimate insurance costs and fail to budget for them.
Many homebuyers don’t understand just what is — and what is not — covered. Standard policies pay for theft and wind, fire, lightning, hail and explosion damage. Not covered is flooding, earthquake damage or problems caused by neglect of routine maintenance, according to Jeanne Salvatore, spokeswoman for the Insurance Information Institute, an industry-sponsored educational group.
“The most important thing is before you buy a home, find out what it will cost to insure it,” she said. “Insurance needs to be calculated into the cost of owning a home. Unlike a mortgage, which you can pay off, you’ll be responsible for the insurance costs forever.”
For flood insurance, most buyers use the National Flood Insurance Program. Earthquake coverage may be available through a state authority or some private companies.
Depending on location, flood insurance can run into a lot of money. The cost of $250,000 worth of government flood coverage on the building and $100,000 of its contents can go as high as $5,714 in high-risk, coastal areas.