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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (12575)	9/30/2004 2:21:20 PM
From: benwood	Respond to of 116555

But the land doesn't burn down -- at least, city plot will look virtually the same before and after a total-loss house fire, and where I live, the plot is valued about the same as the structure. It's a mortgage quirk I believe where you take out a 90% loan for a house and plot but the mortgage holder wants you to insure your 50% house for 90% of the total value, I guess so they don't have to sell the land later even though it's rather obvious they could. My lender won't even let me raise my deductible up to, say $2500, even though I'm good for it, because of their "rules," yet if I use my policy it will get cancelled, so basically I'm forced to pay a for a lower deductible ($1000) that I cannot use (except the one time).

To: mishedlo who wrote (12575)	9/30/2004 3:46:13 PM
From: GraceZ	Read Replies (1) \| Respond to of 116555

I don't know how strong of an indicator this is, but I think it's very interesting. Any know how to confirm if my wife's experience is typical? (That the gap is truly widening between replacement value of homes and value of mortgage) Land is a larger percentage of the total cost. In my area (rural turning suburban) land is usually 1/3 with the house at 2/3s, a 1 to 2 ratio. But I'm told that it is not unusual in CA where land prices are quite high (and houses smaller) for it to be reversed with the land at 2/3s and the house at 1/3. I've had it be completely opposite in replacement insurance. I bought a rental property where the sale price was so low that the replacement cost was significantly higher than the sale price, double in fact. The house was a town house on a tiny lot and it had a lot of historical features which would be expensive to impossible to replace.