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The Hazards of Home Loans: Earthquakes
By Jonathan Haeber
jonathan.haeber@californiamortgagerate.com
California Mortgage Rate Columnist
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Living in an earthquake hazard zone is entirely different than-- saya flood hazard area. Earthquake insurance costs an astronomical sum, for one, but earthquakes are also more likely to cause catastrophic damage to your home. Your mortgage broker will allow you to buy a home without earthquake insurance, but when a disaster strikes, earthquake damage to your home will be your responsibility.
Owning a home in California is just as hazardous, perhaps even more hazardous, than owning a home in other areas subject to natural hazards. The chances of getting hit by a tornado in Kansas are much lower than having your home razed by a major earthquake in Los Angeles or San Francisco, California.
ESRI and FEMA Maps are Your Friends
The Environmental Systems Research Institute (ESRI) was founded in 1969 to provide consulting services to developers. ESRI produces maps, along with the Federal Emergency Management Agency (FEMA). These maps are a valuable reference tool when you're looking for potential hazards near the home you want to buy. Check the bottom of this page for a link to the maps.
It's important to carefully look at the earthquake susceptibility of a California home before considering it for purchase. It takes less than five minutes to view the hazards of the area for such a vital decision.
You can also check with your mortgage broker to see if there are any "insurance contingencies" on your California home loan (insurance contingencies require your broker to show proof of insurance before the home loan process is completed). Though earthquake insurance is almost never required by lenders, if you buy a home in a flood-prone area, you'll be required to have flood insurance.
Tell-tale Signs of Homes in Danger of Quakes
Above all, avoid purchasing a home constructed of brick or stone masonry. These homes are more likely to crack, and their foundations are less sturdy in an Earthquake. Wooden frame houses constructed after the 1960s are the safest to purchase. Homes with reinforced foundations dug down to bedrock are the best bet.
The worst culprit in earthquakes is liquefaction, so avoid purchasing a home built on top of landfill, sand, or mud flats. Make sure the home is not susceptible to mudslides or built on a steep hill.
About the Author
Jonathan Haeber recently closed escrow on his first home. He currently resides in San Francisco, CA. and works as a full-time copywriter for Discovery Channel Stores.
Sources
ESRI/FEMA Home Hazard Awareness Maps
ABAG Earthquake Maps and Information
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