Inspection and insurance

Mortgage » Inspection and insurance

Home inspector checking windows

While the lender and third parties are preparing your loan for closing, here are a couple of things to tackle: You probably will want to have the home inspected, and you will be required to buy homeowners insurance.


Home inspection is commonly required to determine the structural and mechanical condition of the home you're buying, including the roof, heating, plumbing, air conditioning and electrical wiring. The inspection may reveal the need for repairs that the seller may have to complete before the sale of the house can go through.

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It's a good idea to have the home inspected after you agree on a price but before signing the contract and putting down a deposit. If you're in a hurry to lock in the deal, make sure your contract states that the terms are conditioned on a satisfactory professional inspection. The cost of a home inspection typically ranges between $250 and $500.

Homeowners insurance

After the home has been appraised, you'll be in a better position to obtain adequate insurance.

Two types of homeowners coverage

  • Replacement cost policy: A 20-year-old camera destroyed in a storm would be replaced with an equivalent new model.
  • Cash value policy: You would receive nothing for the camera because the item has lost its value over time.

Owners of older dwellings and contents tend to prefer the replacement cost policy, which may cost 10 percent more; owners of newer houses and furnishings should consider the cash value policy.

Whichever policy you choose, be sure to ask your insurance agent about safety features such as deadbolts, storm shutters and security systems you can install to reduce your premium.


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