Four Things to Know Before Buying a Home in a Flood Zone

Four Things to Know Before Buying a Home in a Flood Zone

December 13, 2018

Buying a home is a big financial commitment. Making the decision often involves extensive research, consideration and possibly even a pros and cons list. This is even more true when you’re considering purchasing a home situated in a flood zone. Flooding events in the United States cause billions of dollars in damages each year, according to the National Oceanic and Atmospheric Administration, and flood insurance costs can surpass more than $9,500 a year depending on the flood zone.

The key is to ensure the buyer fully understands what they are getting themselves into before deciding whether buying in a flood zone is the right choice for them. Here are four things you need to know buy before purchasing a home located in a flood zone.

The actual flood zone

The meaning of “flood zone” can vary greatly depending on where it’s located. The Federal Emergency Management Agency (FEMA) identifies whether homes are technically located within flood zones. Some homes are labeled as having minimal risk, while others have the highest level of risk. The zones with the highest risk will likely experience flooding during the span of a traditional 30-year mortgage, in which case the lender will likely require the buyer to purchase expensive flood insurance to mitigate their risk.

Cost of flood insurance

FEMA reported that approximately 25 percent of all flood insurance claims originate from areas labeled low or moderate risk. The claims must be made through separate flood insurance, as conventional homeowner’s insurance doesn’t cover flooding. Most lenders will require borrowers to purchase flood insurance even if the risk is low. Obviously, higher risk properties will have a higher premium. Get several flood insurance quotes before purchasing a home to determine whether the additional premium is something you’ll realistically be able to afford.

Elevation certificates in Seguin, TX

Your insurance company and mortgage lender may require you to procure an elevation certificate that contains the details about the location of the building, the property’s characteristics and the elevation in comparison to the projected height of floodwaters. The certificate is used to determine the level of risk before establishing any premiums. Many buyers use the elevation certificate to make their final decision about whether they should purchase the home. In some cases, the certificate could clarify that flood risk doesn’t actually affect the property, while in others it might demonstrate that the home is likely doomed in the case of a flooding event.

How the risk will change over time

The FEMA flooding map can change over time. A home initially considered low or moderate risk could later be remapped into a high-risk zone after new construction deprives the land of its ability to absorb water from heavy rains. Keep this in mind before you commit to a purchase.

The team at Bettersworth & Associates, Inc. can help you determine whether purchasing a home in one of Texas’ flood zones is the right option for you. Call us today to speak to one of our expert land surveyors if you need an elevation certificate in Seguin, TX.

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