I don't know if Real Estate
Law is the correct category, but here's my question:
I recently refinanced my house from a variable ARM (3.75%) to a fixed 30-year loan at 5%, to lock in to a fixed loan. After closing, I was notified that I needed to raise the coverages of my 3 insurance policies (Beach property, North Carolina - 3 policies are required - Homeowners
, Wind & Hail, Flood). The increases are all based on the appraisal
they did during the loan process, but includes the house, decks, unattached walkways and decks, and uses a $/square foot rebuild value that I believe exceeds the simple nature of how the house is built. I negotiated the Flood coverage down by showing the FEMA coverage does not even cover decks, walkways, - only the building.
I've requested coverage for Homeowners and Wind & Hail be reduced to the appraisal value of the house only, not the decks and walks, which seems reasonable since the land alone is appraised at 82% of the loan value. This will still cost me more, but won't be as harsh. But I'm getting nowhere.
But even with the lower flood coverage, I will have to pay an extra $475 a year in extra premiums. If they had explained this to me before closing, I would not have refinanced. But now it's after closing, the old loan is paid off and I can't go back.
Do I have any options? What can I do? It doesn't seem fair that I'm notified about this after closing and payoff of my original loan.