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Californians Can Expect Delays in Getting New Home Loans
by Sheryl Landrum
CMR Columnist
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October is fire season in California and this year's fire season was a doozy. Adding insult to injury, Californians can expect delays in closing a new mortgage after a major fire as well. Why does this happen and what can you expect when looking for a new home loan after a catastrophic event?
Home buyers with a loan in process may find that closing their new home loans could be delayed after the horrific fires this October. If you are buying a new home or refinancing your current mortgage in an area that has had a fire or other major catastrophe, your lender may want proof that the home still exists and has not lost value before funding your home loan. To do this, your lender may ask for is a 442 or drive by appraisal to ensure the home is as real, and as valuable, as it was when the lender agreed to give you the mortgage loan.
However, insurance companies may not want to insure a property that is in a high risk area, which can cause mortgage delays. After the Cedar Fires in 2004, many San Diegans had a hard time getting homeowner's insurance in areas that were considered high risk. Homeowners may find they pay a premium for homes in high risk areas. Talk to your insurance agent about what you can do to the property to lower your premiums or to make it more insurable.
Yes, it is tough to face extra stress after living through a traumatic experience and no one wants a home loan to be delayed on top of it; however, if it results in saving lives and homes in the future, maybe it isn't so bad after all.
About the Author
Sheryl Landrum is a Senior Loan Officer with First Capital Mortgage in San Diego, California and a freelance writer specializing in mortgage issues.
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