Question:
My current mortgage co doesn't ask this but seems any new HELOC is requiring it!
Answers:
If your house has been rezoned (which happens every few years) to a 100 year flood zone, then ANY KIND OF LOAN using your house as collateral will require flood insurance. But the pre-existing loan won't. If you refinance the first mortgage, you'll be required to carry it.
It's NOT bank specific.
the only time a bank will require that u carry flood insurance is if u are in a high risk flood zone.
The federal government requires all mortgage issuers to require flood insurance on all mortgages covering properties in areas that have been designated by FEMA as being in a Special Flood Hazard Area.
Your insurance agent or mortgage company can determine if you are in one of those areas.
There is also a possibility of getting the requirement waived. It costs a few hundred dollars, but if your home meets certain criteria. Check with your insurance agent to see if you qualify (though most won't work too hard on this as they want to sell you a policy).
That said, flood insurance isn't really expensive for most. We all see the devastation that floods can cause, and your regular homeowners insurance will not cover it.
Another thing to keep in mind is that even if you are not in an area that requires it, about 40% of floods happen in areas that are NOT Special Flood Hazard Areas.
Good luck!
Edited to add - this applies not just to your first mortgage, but also to all loans where your home is used as collateral, including Home Equity Loans and Home Equity Lines of Credit. So even though your first mortgage isn't currently requiring it (likely the flood zone has changed since you took out the 1st mortgage), your HELOC company will. Also, mortgage companies occasionally audit their accounts and update the zones listed on mortgages, so don't be surprised if you eventually get a letter from that 1st mortrgage company that you now need it.
The other possibility is that the mortgage company made an error. As an agent I saw that numerous times, especially when there has been a recent zone change - or if there is a new person at the mortgage company who doesn't understand all of the ins and outs yet. Your insurance agent should be able to give you the most current zone info.
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