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Insurance Information

Most borrowers are aware that homeowners insurance is required as a condition of obtaining a mortgage loan. However, there are other basic types of insurance you may not be familiar with. The following provides information on Required Insurance and Insurance That May Be Required to finalize your loan.

Required Insurance

Homeowner's Insurance*
Homeowner's insurance covers fire, theft, certain natural disasters and personal liability if someone is injured on your property. It also protects the lender against the loss of the property securing your mortgage.

Title Insurance
When you buy a house a title search is done to make sure the seller has a legal right to transfer ownership and to see if there are liens or restrictions on the property. A lawyer, abstractor, or title company employee performs the title search.

Title insurance provides protection against financial loss in case a defect in the title turns up at a future date. Possible defects include:

  • Flawed information in deeds or mortgages (e.g., an incorrect name)
  • Liens or claims against the property or the property owner (e.g., unpaid taxes)
  • Claims to ownership from a former owner or spouse
  • Invalid deeds from a past sale or transfer by a party who didn't actually own the property

Insurance That May Be Required

Private Mortgage Insurance
When you obtain a mortgage with less than a 20% down payment, we may require you to purchase mortgage insurance. Mortgage insurance protects the lender in case you can't make your payments and default on the loan, but it also makes it possible for people with small down payments to buy the home of their choice.

Flood Insurance
Flood damage is not covered by a standard homeowner's insurance policy. To determine if you need flood insurance, ask your insurance professional about the flood history in your area. If there is a potential for flooding, you will be required to purchase a policy that covers the structure and your personal belongings.

Flood insurance can be purchased from an insurance agent or company under contract with the Federal Insurance Administration (FIA), part of the Federal Emergency Management Agency (FEMA). Flood insurance is only available where the local government has adopted adequate flood plain management regulations under the National Flood Insurance Program (NFIP).

*Discount Home Insurance
Save on Your premiums with Liberty Mutual Insurance Group's Savings Plus Program. Premiums are quoted on an annual basis (and are not subject to increases every 3 to 6 months like most insurers). You even have the option of paying your premium automatically with a monthly deduction from your CFCU account. Just visit the Liberty Mutual website. For a free quote, call 888-398-8924.

Mortgage Rates

The Loan Consultant feature determines the products and rates that match your needs.

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