Whether you live in Grapevine or not, we think it's great when we hear from Texas homeowners and learn they do not carry a mortgage on their home. This usually falls in the range of 1/3 of the Texas population. That is a great situation to put yourself in, and we know it's not easy getting there unless you received the house as a gift.
We'll get questions from folks in this situation about whether or not insurance is required at this point. That's a valid question. Why would someone want to pay a premium for insurance on a home if they aren't required to do so? It just so happens, Texans law does not mandate a homeowner as required to carry insurance on their mortgage-free home. So what about those who do carry a mortgage?
The other 2/3 of the Texas population does carry a mortgage and we are required to carry home insurance. You won't sign your name until agreeing to this print on your lending documents.
If you don't choose to shop for and assign this insurance, your lender will place it for you. This is known as forced placed insurance and it gets expensive. This is NOT the route we advise for you to go.
You are borrowing their money and they get to choose the terms. This protects the investment of the lender, but you get to pay the premium. Yay!
Other debts levied against your home may include home equity lines of credit or second liens.
Similar to mortgages, these are issued through a lender and your property is the security behind this. Again, since the money belongs to them, they get to decide what you have to do to secure their investment. They want your property insured. You will pay for it. Yay again!
In the not-so-typical category, reverse mortgages are also a lending instrument and fall on the side of controversial conversation. We won't tell you that you should or shouldn't take on this type of instrument.
We dedicate ourselves to helping you with the insurance side of the equation, and we aim for getting that exactly right. So, here's how a reverse mortgage works.
You let a company purchase your home for a given price and then receive payments as an income stream from that company based on the equity over time.
A caveat is that the equity has to be unencumbered. This could serve as a way to supplement with a monthly distribution to your retirement income as long as you keep expenses down. It is a finite amount after all.
But as in the other two examples, the home insurance payment is on you.
Most Texans are going to pay for home insurance and find it inseparable to maintaining a healthy financial identity.
What we do at Insurance For Texans is help you navigate the situations above. As an independent insurance agent with many carrier option relationships, we can do that.
Let's talk today about what the best solution is for you.