Can anyone recommend an insurance company for a sub to home in California. Im acquiring the home by the end of the week and want to be able to get a trusted insurance company that will not trigger a Due on Sale.
Also, is it possible to add my name on the current sellers insurance as “additionally insured” or is it better to obtain another insurance on top of current insurance and put their name as additionally insured? What’s usually the best way to approach this?
When you change the insurance, the lender sees it. Nothing can be done to fake the insurance company or lender to guarantee the lender won't call the loan. If you change the title, lender sees it. If the title doesn't match the insurance policy and with exact loss payee/ loan number, Catch 22. If you change the title it's a sale, the insurance in old owner's name is no match when you as new owner of record try to make a claim. Subject is considered uninsured.
Seller takes all of the risk to his credit. If you spend money on subject all funds are at risk.
If the loan is not assumable or you can't full documentation qualify to assume the loan, understand the real risks and don't rely on a guru or chat room to back you up when there is a fire or a problem.
When you change the insurance, the lender sees it. Nothing can be done to fake the insurance company or lender to guarantee the lender won't call the loan. If you change the title, lender sees it. If the title doesn't match the insurance policy and with exact loss payee/ loan number, Catch 22. If you change the title it's a sale, the insurance in old owner's name is no match when you as new owner of record try to make a claim. Subject is considered uninsured.
Seller takes all of the risk to his credit. If you spend money on subject all funds are at risk.
If the loan is not assumable or you can't full documentation qualify to assume the loan, understand the real risks and don't rely on a guru or chat room to back you up when there is a fire or a problem.
This can be done with the use of a revocable trust. Find an attorney who knows trusts or looks on YT there are several clips on this subject. What I have done in the past is have the title in a revocable trust before the transaction you outlined and send the mortgage company a certified letter telling them the title is being placed in a revocable trust the name of the trust is ABC and that the insurance will be in the trust name. You have the seller then assign you the beneficial interest of the trust. Wait about 10 days to see if the lender objects and if not go ahead and complete. I have my attorney send the letter to the mortgage company. Carries more weight. Never had a problem.
Just a warning if you try adding your name as Additional Insured. The old owner, as the named insured, has all the power in the policy. For example, if you had the mailing address changed to yours so you would get any refund, the old owner could tell the Company to change it back and they would get the check. Further, their name would be on the check (possibly yours also but not definitely). That would also apply to claims. In any dispute about what is done to a policy, the first named insured is ultimate deciding factor.