The cost to rebuild the home is $101 sq ft. The home is 1000 sq ft.
2007-06-21 04:27:39 · 6 answers · asked by been there- done that 2 in Business & Finance ➔ Renting & Real Estate
To start with, most homeowner policies require you to insure a specific percentage of the value of the property. Usually 80 to 85%. The assumption is that, even if the home is totally destroyed, the land on which it sits has residual value.
Now, to the matter of practicality. Why would you NOT insure it for full value? If the thing burns to the ground, you will lose every cent of equity you have in the property. The insurer would pay out the maximum of $14,000, which would go to the mortgage holder, and you would have no money and a pile of ashes. NOT real bright.
2007-06-21 04:33:40 · answer #1 · answered by acermill 7 · 1⤊ 0⤋
You already answered your own question. It will cost $110,000 to rebuild the home.
Think for a minute here. If you insure your home for only $14,000, what happens if there's a fire? Tornado? Hail? etc...
Who's going to pay to rebuild your home? I doubt you have a spare $100,000 sitting around just waiting to pay for a new home. If you did, you'd clearly be smart enough to know that spending money to protect your assets is a good decision, and wouldn't be asking a question like this.
Your insurance should be sufficient to rebuild the structure. It does not have to match your appraised value (a common requirement for subprime lenders), since some of the value of your home is based on the land it's sitting on. Houses burn down, lots don't just disappear. All you need for that is some sod and seedlings.
2007-06-21 07:20:39 · answer #2 · answered by Yanswersmonitorsarenazis 5 · 0⤊ 0⤋
Homeowners insurance is one of the cheapest insurances you could have. Why risk all of that equity for a small amount of money?
2007-06-21 08:22:24 · answer #3 · answered by QuarterRoy 2 · 1⤊ 0⤋
Hello, My name is Ernest Gonzalez ( Mortgage Broker).
Here is why you would need home owners insurance on your home. The Lender wants security for the monies loaned to consumers buying or refinancing their homes. In case you default on the promisary note to payback the loan or the home is not UPKEPT (they need to protect their investment) or a disaster stricks, i.e. Hurricane, tornados, floods, earthquakes and so on.
If you borrow more than 80% loan to value of the home, then you will also be required to pay M.I. (Mortgage Insurance). This is also a form of security against the money being lent to you as well in case of foreclosure. Which in hand you need to keep in mind, the subprime financial market is in shambles and they are not lending in the subprime market anymore.
I have several web sites that may help you in more detailed information.
Here are my web sites:
Everything you need to know is their and it is completely free! Live mortgage rates and updated mortgage news on a daily basis!
1- ez-INFO
(Live television feeds in every class with live stock quotes, mortgage rates, celebrity news, economy, everything you need to know) ...One Place One Resourse!
http://www.ezinfo.googlepages.com/home...
2- Power, Money, & Success
(Secrets to making money buying property. Detailed and for free as well).
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3- Florida Mortgage Directory
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http://floridamortgagedirectory.googlepa...
Good Luck!
Sincerely,
Ernest Gonzalez
2007-06-21 05:00:50 · answer #4 · answered by ? 1 · 0⤊ 2⤋
possesions, value in your area, ect. It's because you could not replace your home & belongings for any less. That's home insurance works.
2007-06-21 04:31:56 · answer #5 · answered by SadToday22 3 · 0⤊ 1⤋