Today, the borrower, in addition to high interest rates on mortgage loans, as well as costs related to its acquisition, have to pay more insurance.
1. Title Insurance
Rate: 0,5-1,5% of the cost of housing per year
Title insurance is one of the most common types of insurance, which insist many banks that issue mortgage loans. If you buy an apartment in the secondary market, then some time after the conclusion of the contract seller or one of his relatives may try to recognize the transaction invalid. And because housing is in the mortgage, the banks are trying to protect themselves from it and are forced to buy title insurance policy.
In addition, bankers often insist on this insurance when you buy an apartment from a builder. Indeed, in this case, you can also lose the right to property. For example, a developer can declare bankruptcy and the house will not be completed. Or construction in general may be unlawful.
To insure the apartment is the sum of its cost, which will confirm the expert assessment. But it is better to add to it another 10%. So in which case it will be possible to return more than money for lost housing, but also the cost of processing transactions, and taxes.
Payments are calculated individually. Their size depends on the insured amount, term and, more importantly, the number of previous transactions. The more the owners had an apartment or house, the more expensive cost policy.
Sometimes the insurers refused to pay damages under the policy of title insurance. This happens in the case of registration of the sale in a state of drug or alcohol intoxication. Also denied non-payment of taxes. And of course, does not repair the damage if it is proven intent on the part of the insured.
2. Property insurance
Rate: 0,3-1,5% of the cost of housing per year
Since the property in that case is a property, the bank must require it to insure the most common risks. This is a fire, natural disasters and the Gulf water. The remaining risks are coordinated with the client at his request.
Remember that the insured will only walls, windows and ceilings. Therefore, the compensation you receive, but if the house would explode the gas, hit the ceiling or the whole apartment would burn. A purchase of new furniture and repairs will be your headache.