Flood insurance (possible mortgage scam?)?
Posted on Mar 13, 2008 under Insurance Information |I put an offer on a house in a high risk flood plain, knowing that we would have to carry flood insurance. We had checked the FEMA website offering gov't insurance and got an estimate that put the payment around $100 or a little less per month. The real estate agent called and stated she had spoken with our potential mortgage broker and that they had said due to our 'poor credit' insurance would be between 200-300 per month. My credit is fair to good, but not in the 700's by any means. My real estate agent thinks that is outrageous (and states that our credit is not poor enough to penalize us this way).
My question is, do most mortgage lenders only use certain companies? Why don't they allow you to shop around and get the best rates if that is so? Or am I being set up so someone can make an extra $300/month????
Is there any way to make a lender let me shop around for flood insurance?
March 13th, 2008 at 8:01 am
You can not only shop around for insurance, but for a different mortgage company as well.
However, if you credit is not even 700 no one will call that "good".
I do not live in a flood area, but am seriously unclear on what your credit rating has to do with flood risk. For this reason, the lack of association, I would find another loan.
March 13th, 2008 at 8:01 am
You have every right to contact other mortgage companies and ask this question.
Also, I sold a house a few years ago and I was stunned at how these people were jerked around by the broker.
I have always dealt with banks and credit unions for mortgages and never had these awful experiences.
Usually, flood insurance runs about an extra $100 a month.
I can't see how your credit history would have anything to do with the cost of insurance.
Go look around.
March 13th, 2008 at 8:01 am
Your credit score does affect what rate you get on insurance. Most insurance companies have your credit as one of the foundations on which your rate comes from. There are some out there who do not check your credit, although I dont think 700 is bad, maybe one who doesnt check credit is a better option for you. And yes, you can search for your own insurance, you dont have to take who they get.
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