I have a property in Maryland that I'm currently refinancing. I learned (newbie mistake) that the unit is actually in a flood zone a and the lender requires flood insurance. I took action and got the required elevation certificate ($575 later) to provide to my insurance agent. I got the the estimate at $3750 annually. I've received several quotes and they're all within the same price range.
There's a stream in the back of the property and the back side of the unit is in the flood zone while the front isn't.
The question I had is: I purchased the property cash and was getting a cash-out refi. With the flood insurance cost, this unit will be neg cash flow unless I increase the equity in the unit which brings it down to less than 5% cash on cash. Is it worth refi-ing and paying the 7k in closing costs or should I just leave the money in the unit and not be required to get flood insurance.
I appreciate your feedback.
You can check out the private flood market, their pricing will be better than the NFIP. Some banks won't accept it though. Good luck.