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I'm trying to figure out what will happen to the people whose homes were demolished. Here is my specific question: Do the companies who give cash-out refinancing and/or home equity loans make the homeowners buy more insurance?
If someone counted on selling his or her house based on what their neighbor got last month and used that to justify a home equity loan what would happen should their home be trashed?
Our house (here in Florida) is insured for ($145,000), assessed by the property assessor at $208,000, but a neighbor just sold a similar house for over $300,000. We paid far less than any of those numbers and owe less than $100,000, so I know what would happen to us, but what if we accepted one of the many offers we get on a daily basis to cash out huge sums of equity?
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