Calculating Amount of Required Hazard Insurance
Answer by Randy Carey, BOL Guru Guru Bios
Question: Is the amount of hazard insurance that should be required on a real estate secured loan calculated as the appraised value less land value or loan amount less land value? Does it differ according to property type?
Answer: The amount of hazard insurance coverage is not governed by regulation. It's purely based on the bank's internal policies based on the bank's perception of the risks presented.
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