Flood insurance
A separate policy that covers flood damage, which regular homeowners insurance excludes. Lenders require it for federally backed loans on homes in high-risk flood zones; it is available through the NFIP or private insurers.
Also called: NFIP, flood policy
Related terms
An area FEMA maps by flood risk. If a home with a federally backed loan is in a high-risk zone, flood insurance is usually required.
A document from a surveyor or engineer showing a building's height relative to expected flood levels. It can greatly affect flood insurance cost.
A policy covering the home and belongings against damage such as fire or wind, plus liability. Lenders require it before closing. Standard policies do not cover flood, and often not earthquake.
An account the loan servicer keeps to pay your property taxes and homeowners insurance, funded by part of each monthly payment. It is reviewed yearly, so the payment can rise or fall with tax and insurance bills.
Short for principal, interest, taxes and insurance, the four parts of a typical monthly mortgage payment. Lenders use PITI, plus any HOA dues or mortgage insurance, to judge whether you can afford the loan.