In Ireland, all mortgage lenders will require you to have home insurance before you can access the money to buy your home. This is to protect both you and the lender in case of damage or loss to the property. In this blog post, we will look at why it’s important for the lender, but especially for you as the homeowner.
Why Home Insurance is Important to Lenders when Getting a Mortgage
Home insurance is important to lenders when getting a mortgage because it protects their interest in case of damage or loss to the property. The lender is giving out a huge sum of money to you as the borrower to buy the house, and as they hold onto the deeds of the house as security, ensuring you take out home insurance means they are covered if the worst happens. For example, if there is a fire or damage to the property that could mean the property is valued less than what you borrowed. If something were to happen to your home, the insurance policy would cover the cost of repairs or replacement, which gives the lender peace of mind knowing that their interest is protected.
Why Home Insurance is So Important for You
This might seem obvious to some, but home insurance is important because it helps protect your home and personal belongings from unexpected events, as we mentioned above. It can also provide liability coverage in case someone is injured on your property. One of the important things to remember if you are buying your home and are in the process of getting a mortgage is the amount you insure the property for must match what’s called the “reinstatement value.” This is the value of rebuilding the house back up from the ground and can differ substantially from the market value of the property. You will get this figure from the valuation report, which an auctioneer will conduct on the bank/lender’s behalf. If you already own the property, you can just use the approximate value of the house for the buildings amount to insure.
At Ezfees Financial – Mortgage & Life Broker
While we don’t sell home insurance at Ezfees Financial, we can certainly give you expert knowledge and advice on the steps involved with buying your new home. Our financial advisors are on hand to go through the A-Z of the mortgage process, including choosing your home insurance.
Why not give us a call here at Ezfees Financial for guidance, advice, and peace of mind during this important life journey. Our team can provide you with valuable insights into the home insurance and mortgage industry in Ireland, and help you navigate the process of buying a new home.
Conclusion
Home insurance is a critical part of the mortgage process in Ireland, and it’s essential to have the right coverage in place to protect both yourself and your lender. By understanding the reinstatement value, liability coverage, and other important factors, you can ensure that you have the right insurance policy in place to give you peace of mind as a homeowner. At Ezfees Financial, our team is here to help you navigate the home insurance and mortgage process, and find the best solution for your unique needs. Contact us today to learn more about our services.