An "informed but informal" place to find real estate information
Of the many questionable costs that a homeowner has to pay, I am frequently asked by buyers in Hoboken or Jersey City, "why do I have to pay flood insurance?" In addition to regular home owners insurance, lenders will often require that borrowers purchase additional flood insurance in order to secure a mortgage. The reason for this goes beyond the actual property that you are purchasing in Hudson County. Flood insurance is required by federally regulated or insured lending institutions before they offer loans. It doesn't only apply to people who live in high risk areas.
If banks wouldn't lend money to people buying property in areas of the nation that have a history for flooding, such as places in high flood zoned areas like the Mississippi River, New Orleans or Florida, it would have a major effect on the overall national economy. Places near vibrant waterfront areas wouldn't be able to have development because the private insurance market would not cover the risk of these natural disasters. To counter this problem, the Federal Government stepped into the insurance market in 1968 to establish a national policy which divides flood risks into different levels. Congress created the National Flood Insurance Program (NFIP) in response to the rising cost of taxpayer funded disaster relief for flood victims and the increasing amount of damage caused by flood. The Federal Emergency Management Agency (FEMA) manages the flood program. The Army Corps of Engineers has prepared maps that identify specific flood-prone areas throughout the country. You can go onto the FEMA site if you'd like to see a flood hazard map of your area, http://www.fema.gov/nfip/
So its not that the banks are only concerned about actual flooding in this area, the government insists on spreading the risks on all of us who have mortgages that are somehow connected to the federal system in order to not place this burden solely on the high risk areas.
Going forward, every now and then I will continue to go over the different expenses that will occur when buying or selling property to give you a better understanding as to what the costs will be and the reasons behind them.
About me
- I'm Judy Marciano
- From Hoboken, NJ, United States
- Thanks for checking out my blog. I am a full time licensed NJ real estate agent in Hoboken at Empire Realty Group. As I go thru Hudson County each day, often I stop to take a picture. Feel free to contact me for any real estate assistance at jmarciano@empiregroup.com
Previous posts
- million dollar condo's in Hoboken
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- Hoboken residential inventory
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- Hoboken condo inventory
- Meadowlands Exposition Center, Secaucus
- pictures from todays parade in Hoboken
- weekend happenings in Hudson County
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- supply drives demand
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