Banks require home loan applicants to take out a homeowner’s insurance policy to cover the risk of damage to the property that may result from natural disasters such as fires, storms etc. The value of the cover is determined by the value of the property.
In addition, an applicant may be required to take out a life insurance policy to cover the bond instalments due in the event of death, disability and/or retrenchment. The value of this policy will depend on the balance owing under the home loan.
When considering to purchase a home with a mortgage bond, contact a conveyancer at STBB beforehand for assistance with all aspects of the transaction.