va mortgage loans flood insurance

VA Loans

When Do VA Mortgage Loans Require Flood Insurance?

When you buy a home, one of the first things you’ll need to do is to find homeowners’ insurance before you close on the property. This shows your lender that you’re serious and willing to make every effort to fully protect the property you’re buying. This insurance is necessary whether you’re using VA mortgage loans or conventional mortgage loans.

However, even the most comprehensive homeowners’ insurance policy won’t protect against every possible threat. Flooding is one such hazard but dedicated flood insurance can help fill in the gaps. So, when do you know if you need the policy?

It’s All About Flood Risk

Every property is different and the types of risks they face will largely depend on their location and proximity to waterways. Before you can close on the property, the VA will appraise the structure and, if they determine that the property is at high risk for flooding, you’ll need to invest in flood insurance.  Your lender should be able to tell you whether flood insurance is needed once they process your application and approve you for the loan.  

Flood Insurance Is a Wise Investment Regardless

Even if your property is in a low-risk area, flood insurance is almost always worth the investment. Policies are relatively cheap and, since flooding can happen unexpectedly, it’s best to protect yourself as soon as you buy the house. This is the case even if your lender doesn’t require you to buy coverage to qualify for the loan.

What Happens If You’re Not Covered?

Homeowners’ insurance policies only cover water damage due to ruptured pipes and other similar issues. If your home or property is damaged by a flood, you’ll have to pay for the cost of the repairs out of pocket.

Instead of leaving things to chance, contact your insurance agent and discuss your options before you close on the property. They’ll be able to help you find a flood insurance policy to fully protect your house, whether you’re using standard loans or are applying for VA mortgage loans.

Requirements Vary From Lender to Lender

Ultimately, it’s up to the lender to determine how much insurance you need to buy to qualify for the loan. The best thing you can do is shop around for VA mortgage loans and compare the requirements. Then, look at the quotes, and the monthly payments you’ll need to make over the life of the loan. Reach out to our team to discuss your options.