lets face it, my house budget is very much at the "nothing is move in ready" level. the one house that was move in ready at my budget went 25k over asking. everything im looking at in my budget is a fixer upper, but my partner is also a contractor so…fixer upper is not the worst thing on earth. but one of the houses on our radar was a hoarder home, that will need the kitchen and bathroom completely redone and the flooring and drywall to get stripped to the studs. I was wondering how homeowners works with that since like, we're obviously going to be doing major renovations if we go with that option.
like, is the premium based off the sale price, or off what the expected valuation will be after reno? What if there is something that is currrently making it "uninsurable" such as electrical issues that we need to remediate anyway?
how does homeowners work with a 203k to purchase?
byu/Retro_Relics inInsurance
Posted by Retro_Relics
1 Comment
No home insurance is ever based off of the sale price. Home insurance is based on Estimated Replacement Cost.
If you move into a home and put time, effort, and money into improvements that boost the value of the home then your insurance policy should reflect this.
I’ve helped people in the past reevaluate the replacement cost on their home after renovations have been completed, this can usually be done during the policy term.
If the home burnt to crisp, you would want it put back the way it is.