What does the Mortgage Company doe with any money lefted from insurance claim?
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After all the repairs have been done, I will have 10,000 left over. Do the mortgage company keeps the money and apply to my loan or do they cut me a check?
Asked April 18, 2018
There have been some homeowner complaints over the years in Texas about mortgage companies claiming part or all of insurance monies paid out on homeowner's insurance policy repair claims. The fact is that the terms of the agreement with a mortgage company, the cost of the repairs and a homeowner's account status affect how most lenders treat insurance payments made to both them and the homeowner.
Your best course of action is to review your mortgage contract and speak with one of the mortgage company's local representatives about the remaining $10,000. It's important to note that lenders initially hold onto all insurance funds involving a large payout needed for extensive home repairs to guarantee that a homeowner won't simply take the money and run. If contractors provide estimates that indicate that the repairs will cost less than the payout, the mortgagee keeps the remaining funds until the home is entirely restored and the contractors have been paid in full. The lender then typically sends an inspector to the property. Once the inspector approves the work, the lender might cut the homeowner a check for the remainder or apply the money toward the mortgage balance.
Why do mortgage company's refuse to give back money to homeowners who have paid for it through their insurance premiums? Both you and your lender are invested in your property. If you at any time broke the terms of the loan agreement by not making your mortgage payments on time or you fell behind on payments, your lender might take the remaining money to bring your account up to date.
Again, you should speak with your mortgage company about your concern. Your lender is best positioned to provide you accurate guidance based on all of these factors and other factors possibly written into the terms of your mortgage agreement.
Answered April 19, 2018 by InsuranceStar