Buying an Irvine home for sale can be an exciting and overwhelming experience. Unfortunately, many first-time buyers get so caught up in the excitement they fail to consider some of the hidden costs of homeownership. Before you fall in love with a home, make sure you factor these seven insurance costs into your budget.
1. Homeowners Insurance
Most buyers expect to pay for homeowners insurance although the cost can be surprising. Begin researching policies a few months ahead of your purchase so you can compare quotes and sit down with an agent to make sure you have the coverage you need without overpaying. In California, homeowners pay an average annual premium of $911 for homeowners insurance. That breaks down to almost $76 per month, which will likely be added to your mortgage payment.
2. Private Mortgage Insurance (PMI)
If you are getting a traditional mortgage, you may be hit with an unexpected expense: private mortgage insurance. PMI is a way for lenders to protect their investment in case you default on the loan. With most loans, you will need to pay PMI if you put down less than 20 percent. PMI varies by loan size, but it may add another $100 to your mortgage payment.
3. Condo Insurance
Planning to buy a condo in Irvine? Don’t forget to consider the cost of condo insurance, which may be required by the condo association. Condo owners are usually responsible for insuring the portion of the condo they own. Some, but not all condo associations require owners secure their own in-unit coverage before closing.
4. Flood Insurance
Flood damage is not covered by homeowners insurance policies and coverage requires a separate policy. If the home you plan to buy is located in a flood plain, you will be required to purchase supplemental flood insurance. The average flood insurance policy is $700 per year, although the greater the risk the higher the premium.
5. Title Insurance
Title insurance protects homebuyers from unlawful transfer of ownership from a previous owner as well as outstanding liens that may be in place. Title insurance is a one-time expense you will need to pay at closing and it will likely cost around $1,000.
6. Earthquake Insurance
Californians are no strangers to earthquakes, but only 17 percent of California homeowners have earthquake insurance. While not required, this type of coverage is worth the expense. The average earthquake insurance policy in California costs $800 a year, although premiums are highest in San Francisco and lower in areas like Irvine.
7. Umbrella Insurance
Umbrella insurance isn’t required, but it may be a smart investment for condo and homeowners. Umbrella insurance is additional coverage that protects assets by covering costs that exceed the limits of your other policies.
Need help finding the right house for sale in Irvine to call home? Check out our inventory online and give us a call at (714) 454-6304. Our dedicated team of real estate experts can help you find a wonderful new home that won’t break your bank.