2nd mortgage co. says deductable to low, wants 1500 instead of 1000 we have on our insurance. can they?

Question

Signed contract with no deductable amount specified. Now 2 months later they say they require $1500 and our insurance is a $1000 deductable.
They have added new insurance to our loan and we are required to pay the premium. How can they do this without it being in our contract or without revealing this at the time we secured our second mortgage?

Answer 1

I don't understand your question because what you are saying you have now with the $1000 deductable is better coverage than what you are saying they want, which is a $1500 deductable. I don't understand what you are saying. Maybe you didn't have any coverage on the 2nd line of credit and that is what they are making you get.

Answer 2

They can demand that you carry insurance at limits defined in the contract. But if you already had insurance with a $1000 deductible, that's BETTER THAN $1500 deductible, so that doesn't make any sense. Are you sure that there wasn't some additional issue with the insurance you already had?

Also, if there wasn't anything in the contract, then I wouldn't think that they could just arbitrarily charge you.

Talk to them again, and ask what's going on. Maybe it's a mistake, and they didn't have your existing insurance info in their records or something.

It's pretty common for insurance to be required by the lender on either a house or a car that has a loan on it, so I'd be surprised if it wasn't somewhere in the contract, but since you already had it, that should not have created problems.

Answer 3

is this homeowner insurance or PMI? it is hard understanding what you're saying..when you say 2nd mortg co are you meaning a second lien holder or 2nd opinion mortgage co.? they can do what they want, it is their guidelines- but the mortgage company doesnt have a deductible requirement (thats the hazard insurance company) unless the deductible changes your premium (it will) and then the premium affects your DTI (debt-to-income ratio ...how much money you make versus your housing expenses usually less than 45%)