Evansville, IN · Member since 2014 · 11 posts · 1 vote
When buying a house sub to the current owner has taxes and insurance escrowed. Do they cancel their policy and I get one? If so how will that work with the bank? Will it cause them to call the loan due?
@Brian Elliswhen you change the name on the insurance it will likely trigger the due on sale clause. You could chance it and if you get called out you will have to change it back or just leave it as is and set up a joint checking acct. with the current owner and pay from there so he can monitor the activity and know that the bills are being paid on time.
You should be added as additional insured on the policy. It won't cancel it, and it is essentially invisible to the lender. Of course, they could call the note, but it is the risk under any subject to. I would still rather have coverage than none at all.