An elevation certificate is necessary if you have to get flood insurance. You need flood insurance if you buy or own a home in specific flood zones. The certificate shows the building’s elevation, the type of building, and where the building is located on the flood map.
The certificate shows the difference between the base flood elevation for your area and the home’s elevation. The certificate will then help you when you secure flood insurance. In some cases, it can even save you money on expensive flood insurance premiums.
Obtaining the Elevation Certificate
If you know the home you want to buy is in a flood zone, you’ll need the elevation certificate. You may find that there is already a certificate on file. Check with your county to determine if this is the case. If it isn’t, you’ll have to hire a surveyor or engineer to provide the certificate for you.
The cost of the certificate varies by location and the depth of the job. In some locations, it costs around $500, while in others, you would pay as much as $2,000 for the certificate. Like most other mortgage-related products, you can shop around to find the best deal.
Keep in mind, if you do use an existing certificate, you may have to pay for it to be upgraded if it doesn’t contain the necessary information. While certificates do not expire, they can become outdated, requiring an update, at the very least.
Getting Flood Insurance
Once you have your elevation certificate, you can secure quotes for flood insurance. The amount you pay for the insurance will depend on the height of your property over the Base Flood Elevation. There is a direct relationship between the two. The higher your elevation is over the Base Flood Elevation, the less premium you will pay. This is because you have a lower risk of flooding. The lower the difference between your home’s elevation and the BFE is, the higher your chance of flooding and the higher your premiums.
The good news is that if your home is not in a flood zone, you won’t need an elevation certificate. Typically homes in a flood zone beginning with A or V are in a high-risk area and require flood insurance. Homes in flood zones starting with B, C, or X are in low-to-moderate flood zones and don’t need insurance. This doesn’t mean you cannot buy flood insurance, but you generally will not need it to close on your loan.
The elevation certificate may cost you a decent amount of money when buying a home, but it can save you money in the long run. It ensures that you pay a fair premium for your flood insurance, should you be in a flood zone.Click to See the Latest Mortgage Rates»