Most people who finance a home will wrap their homeowners insurance into their monthly mortgage payment. This creates a surprise for some house hunters who use online mortgage calculators to figure out how much they can afford.
Because most of those online tools calculate only principal and interest and don’t account for other things that affect a monthly mortgage payment, such as homeowners insurance and property taxes. By knowing a little more about some caveats of insurance, though, you can make a better financial decision when shopping for a home.
While a plethora of things exist that influence how much you will pay in premiums, such as the deductible, previous claims, etc., we will focus only on three easy-to-remember areas that we’ve found commonly slip the mind of those shopping for a home: construction materials, age and location. *Remember this article is aimed at helping you to realize a lot of factors can affect your monthly mortgage payment – please consult a licensed insurance agent for details and when shopping and getting quotes for insurance.*
Homes mainly made from wood will typically carry higher insurance premiums than ones built from brick. In fact, a masonry house will almost always carry lower insurance than a structure built from flammable materials — all things else being equal.
A reliable resource to check a building’s makeup is its respective county’s property appraiser Web site. In addition to listing whether the house has a concrete frame, it should also publish the type of roof, interior walls, air conditioning and much more. Call us at 813-707-6200 if you have questions or need help with this.
Age is important, too. Older homes typically have older roofs, electrical systems and plumbing, among other things. Insurance underwriters can view this as risky, raising the cost of insurance.
In real estate, there is an age-old adage, “Location, location, location.” It also holds true for insurance. Obviously, a home that is in a flood zone will need a flood-insurance policy in addition to homeowners insurance. Other things to consider about location include, but are not limited to, the crime rate and the building costs in the area. You can check the crime rate by reading the FBI’s “Uniform Crime Report,” a yearly report that breaks down the numbers for violent crime and property crime in your area.
We could go on and on, and insurance isn’t the only cost to be considered when figuring out how much you can afford to spend on a house. Property taxes, credit score and many other things can come into play. Our team is diverse with experience in credit repair, title, real estate and the list goes on. Call us at 813-707-6200 if you need any help with figuring out how much you can afford for a monthly mortgage payment.