The home buying experience can be an overwhelming experience that can be exhilarating, fun, stressful and exhausting. The process of securing a mortgage, successfully bidding on a home and completing the transaction can be lengthy, complex and involve seemingly endless professionals. Those professionals may include a buyer’s agent, a loan officer, a home inspector, title […]
Is My Property In A Flood Zone? If So, Should I Buy?
Purchasing a home comes with its own set of risks, one of which is flooding.
Flooding is an expensive, time-consuming, and stressful event that damages thousands of homes each year. Flooding can be caused by natural causes, like a flooded river or other reasons like a leak in your home’s waterline.
If you wish to purchase a home that is in a flood zone, there are several questions you will need to ask yourself and steps you will need to take:
What Flood Zone Is The Home In?
You will need to research what flood zone your desired home is in to help determine risk and your desire to shoulder that risk. Flood zones are rated in terms of severity, or a Special Flood Hazard Area (SFHA). According to FEMA, SFHA is defined as “the area that will be inundated by the flood event having a 1-percent chance of being equaled or exceeded in any given year.”
Remember, a low flood risk doesn’t mean any chance at all.
When Was The Home Built?
If the home is an older one, you may have to do some updates on it to bring it up to date and protect it against flooding and moisture in susceptible areas such as the basement.
The year the home was built is also a factor in determining insurance premiums and flooding risk, as flood areas change over the years. For example, if a home was built before the current flood insurance rate map (FIRM), it could be at a higher risk of flooding and insurance premiums.
You Will Need Flood Insurance
Depending on what flood zone the home is in, you will be required to have flood insurance. In fact, many homeowners’ insurance doesn’t cover flooding. Only when you get flood insurance will a mortgage lender agree to lend to you.
You’ll Need An Elevation Certificate
Before you can get flood insurance and close on the home, you will need to get an elevation certificate. This certificate provides information that shows compliance with community floodplain ordinances and helps your insurance company determine the proper insurance premium rate.
You must know if you are willing to pay the costs associated with flood insurance and minimizing risk through upgrades like sealing the basement and elevating appliances like the furnace and water heater.