How Flood Insurance Affects Home Loans Mortgage lenders consider seven items when analyzing housing debt to income ratios: • principle (amount of loan) • interest • homeowner’s insurance • flood insurance (if applicable) • property taxes • mortgage insurance (if applicable) • mandatory homeowner’s association dues (if applicable) Flood insurance is only factored into the equation if it's required, meaning that you're not in an X zone. If you're in an X zone but choose to have flood insurance, a lender is not going to hold that against you. How does Flood Insurance affect you when buying or selling a home? Let’s say, you and your neighbor have the same home listed, for the same price. The only difference is, your home is in a flood zone, which requires flood insurance. If that policy is $450 a year, that changes your monthly mortgage payment by $37.50 a month. As a home buyer, this means that you could finance $4,000-$8,000 more on a house with no flood insurance if financing for 30 years. (Continued on page 10) CONTACT KELLEY TODAY FOR YOUR HOME FINANCING NEEDS! Purchase, Refinance, Renovation, Construction, Jumbo, First Time Home Buyer, Investment Property, VA, FHA, USDA Kelley Sullivan SENIOR MORTGAGE BANKER (912) 844-2593 ksullivan@banksouth.com www.SavannahHomeLoan.com NMLS: 213216 Equal Housing Lender. BankSouth Mortgage Company, LLC. NMLS 690971. Terms subject to change without notice. Subject to credit and property approval. Property insurance, and if applicable, flood insurance required. January 2018. 9
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