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MORTGAGE KNOWLEDGE CENTER

PenFed Mortgage with Confidence

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CONVENTIONAL LOANS

Rates starting at % (APR %)¹

 

Apply before becoming a member.

After your application, we’ll help you:

1. Discover you’re eligible to become a PenFed member

2. Open a Savings/Share Account and deposit at least $5

  1. Home
  2. Mortgage Knowledge Center
  3. How to Protect Your Home From Water Damage

MORTGAGE

How to Protect Your Home From Water Damage

What You'll Learn: Learn about the steps you should take to ensure your home is flood ready

EXPECTED READ TIME:4 minutes

June 23, 2023

How to Protect Your Home From Water Damage

Water damage can quickly be one of the most devastating types of damage your home can experience. From leaks in the roof, overflowing toilets, and burst pipes, to flood waters rushing in, water can cause substantial harm to your home, belongings, and family in the briefest amount of time. According to National Flood Services, one inch of flooding can result in $25,000 in damages. There are several inexpensive ways in which you can protect your home from water damage; we will start with some tips on steps you can take to directly safeguard your home and then discuss the two types of insurance needed to protect your home and belongings financially. 

Six Steps to Protect a Home

Inspections

One of the best ways to easily prevent water damage is by inspecting your home for leaks twice a year. Check all ceilings, walls, and floors for water spots. Inspect any exposed pipes for signs of corrosion or leaks, and then inspect the roof for any damage, including holes or missing tiles/shingles and algae or mold. If anything is found, it is essential to address it quickly to prevent further damage, which can be costly.

Sump Pumps

A sump pump can be a lifesaver if you reside in areas prone to heavy rains or flooding. Sump pumps are designed to prevent significant water damage to your basement, which is one of the most common areas of a home to experience water damage. Sump pumps are installed in a basement area called a sump pit; this is where water is designed to accumulate, and the sump pump removes it before it becomes a threat.

Clear Gutters and Downspouts

Water can back up and enter your home causing damage if gutters or downspouts are blocked. Additionally, if downspouts are not properly moving water away from your home due to leaks, improper instilation, or broken connections water can accumulate near your home causing damage to walls and the foundation. It’s essential to regularly (spring and fall) clean out and inspect your gutters and downspouts to ensure that they are working as desired.

Water Alarms

A water alarm is a device that sounds an alarm when it detects the presence of water. A water alarm can give you an early warning in case of a leak in your home, allowing you to take action before the damage becomes too extensive. Water alarms will generally be placed in areas where water damage is most likely to occur, such as near your water heater or washing machine. 

Turn Off the Water Main When Going on Vacation

If you will be away from your home for an extended time, it is recommended to turn off your main water supply for the duration of your absence. Doing so can help prevent water damage if a pipe bursts while you are away. A home that is unheated is more likely to have pipes freeze; bleeding the pipes (letting water out after the main is turned off) can also reduce their chance of bursting due to freezing. The Red Cross recommends that if you are going to be away from a home during cold weather, the thermostat should be set at 55 degrees to prevent pipes from freezing.

Insulate Pipes

Pipes in attics, garages, and other unheated areas are susceptible to freezing and bursting. Insulating these pipes using pipe sleves can help prevent this from happening and protect your home from water damage. In severe situations, heat tape and heat cable can be used to warm exposed pipes, so they don’t freeze.

Insurance

The second line of defense against to fight water damage is through the use of insurance; while it won’t prevent water damage, it will provide financial protection in case of water damage due to flooding or another cause in the home. Damage from water is covered under two types of policies, homeowners and flood insurance.

Homeowners (and renters) insurance

Homeowners and renters insurance can be crucial tools for protecting your home and its contents from water damage. Most standard homeowners insurance policies will cover water damage caused by sudden and accidental events, including burst pipes, roof leaks, overflowing toilets, and in some cases, instances of backed-up sewers. However, it’s imperative that you understand what your policy covers and what it doesn’t. Damage due to flooding is typically not covered under a standard homeowners insurance policy and therefore requires a separate flood insurance policy to protect you. Before any water damage event occurs, it’s a good idea for you to review your homeowner’s insurance policy and understand what it will cover. 

Water backup (and sump pump overflow) endorsement- this is an addition to a standard homeowners or renters policy providing added protection from water damage that results from backed-up drains or failed sump pumps.

Additionally, depending on your needs, you may want to consider purchasing additional coverage,such as a water backup endorsement, to ensure that your home is fully protected against water damage. By having the right insurance coverage in place, you can ensure peace of mind knowing that you’re protected against the financial losses that can result from water damage to your home.

Flood Insurance

Though homeowners and renters insurance covers many types of water damage protecting your home and belongings, you should also consider purchasing flood insurance if you live in a flood prone area. According to the US National Flood Insurance Program (NFIP) and FEMA, the best way to protect your home and belongings in case of a flood, is to purchase flood insurance.

Flood Mitigation

There are several mitigation steps that you can take to reduce the damage that is caused by flooding. Taking flood mitigation steps can also reduce your costs for flood insurance and some steps prevent damage from happening in the first place. While significant mitigation steps can be costly, they can be eclipsed by the damage that a single flood can do, and the same property can still be at risk from the damage of future floods.  

Several mitigation types can lower a property’s premiums for flood insurance when properly executed.

  • Property relocation- moving a structure outside the flood area to higher ground
  • Basement infill- defined as filling any area of a building with its floor below base flood elevation on all sides
  • Abandonment of the lowest floor- of a structure so that the entire home is on the second story with minimal to no living areas on the first story.
  • Elevating the lowest floor- or also elevating all building equipment and utility systems and/or protecting them from flooding in their current location.
  • Wet floodproofing (using flood openings)- creating openings that allow flood water to flow in and out of unoccupied areas, lowering the risk of structural damage. The unoccupied areas of the home must also be made flood resistant.
  • Dry floodproofing- sealing a structure, preventing water from entering

FEMA will make an individual determination on discount eligibility for other mitigation steps. 

Community mitigation

In some instances, whole communities can be eligible for federal flood risk mitigation grants. These grants can be of benefit to the home and business owners in the floodplain. As a homeowner, you may want to encourage your local officials to apply for such grants. 

Summary and Final Thoughts

While water can cause severe damage to your home and belongings, there are many steps you can take to protect yourself. Regularly inspecting your home and taking preventative measures, including the installation of sump pumps and water alarms, as well as efforts to prevent bursting pipes, is your first step. Purchasing homeowners and flood insurance, especially if you live in a flood-prone area, is the second step you can take to prevent significant financial burdens. Flood insurance costs can be reduced through personal and community mitigation efforts, which may be costly but, in the long run, may bring peace of mind and prevent further outlays and headaches from ever happening.

For more information about PenFed Mortgages:
 

PenFed Mortgage: 

800-970-7766

Get Started

SIMILAR ARTICLES

How to Prepare Your Family and Your Home for Natural Disasters

Get guidance on emergency professionals' recommendations for preparing your family and home for natural disasters.

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Items that are (Probably) not Covered by Your Homeowner's Insurance Policy

Curious about you homeowner's insurance limitations? Here are some items that are probably not covered under your policy.

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Tips for Finding Excellent Contractors, Electricians, and Plumbers

Not sure how to decide who to hire for your home renovation, electrical work or plumbing? Here are some tips to help you make a more informed decision.

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Mortgages 101: What First-Time Homebuyers Need to Know

Overview of mortgage terminology that first-time homebuyers will come across when buying their first home. It's important to understand the terminology used so buyers can better understand their mortgage.

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CONVENTIONAL LOANS

Rates starting at % (APR %)¹

 

Apply before becoming a member.

After your application, we’ll help you:

1. Discover you’re eligible to become a PenFed member

2. Open a Savings/Share Account and deposit at least $5

Home Buying Steps

  • Getting Started
  • Finding a Home
  • Getting a Mortgage
  • Home Ownership

Mortgage Topics

  • VA Loans
  • Conventional Loans
  • First Time Homebuyer
  • Home Equity
  • Homebuying 101
  • Checklists
  • Adjustable Rate Mortgages
  • PenFed Top 10
  • Refinance
  • Jumbo Loans
  • FHA
  • Videos

Mortgage Products

  • Mortgage Center
  • Refinancing
  • Home Equity

PenFed HELOC

Rates as Low as % APR* with flexible use of funds

Apply before becoming a member.

After your application, we’ll help you:

1. Discover you’re eligible to become a PenFed member

2. Open a Savings/Share Account and deposit at least $5

Disclosures

1Except for holidays, rates are updated Monday through Friday at 10:15am EST. The advertised rates and points are subject to change. The information provided is based on discount point, which equals percent of the loan amount, and assumes the purpose of the loan is to purchase a property with a 30-year, conforming, fixed-rate loan. Loan amount of $400,000; loan-to-value ratio of 75%; credit score of 760; and DTI of 18% or less. The property is an existing single-family home and will be used as a primary residence. The advertised rates are based on certain assumptions and loan scenarios, and the rate you may receive will depend on your individual circumstances, including your credit history, loan amount, down payment, and our internal credit criteria. Other rates, points, and terms may be available. All loans are subject to credit and property approval.

*Prime Rate is % as of . The APR for this Home Equity Line of Credit (HELOC) is based on prime plus a margin and can change monthly. Fixed Rate Advances will be amortized over the Fixed Rate Advance Term, with the payment consisting of principal and interest. Your Annual Percentage Rate for a Fixed Rate Advance will be calculated by adding your Prime Rate, your Margin, and the Additional Fixed Rate Lock-In Margin. Your Annual Percentage Rate for a Fixed Rate Advance shall not exceed 18% and shall be equal to or greater than % for primary residences and second homes.

  • Annual Fee: Notwithstanding the foregoing, an annual fee of $99 will be assessed on each account anniversary.
  • Home equity lines of credit (HELOC) are variable rate loans and the interest rate is subject to increase after consummation of the loan on monthly basis. Closing costs range between $500 and $8,500 for credit lines of $500,000. Contact a representative for additional details.

Appraisals: PenFed will attempt to establish value via an independent method. If that method is unsuccessful, or the value is not sufficient for the amount requested, an appraisal will be required regardless of CLTV. An appraisal is always required in the following circumstances:

For all loans with a loan amount greater than $400,000.

If an appraisal is required, it must be ordered by PenFed. You will be contacted for authorization and payment prior to ordering. Appraisal fees average $550 to $850 (some run higher).

  • Closing Cost Credit: PenFed will pay most closing costs associated with a home equity line of credit (HELOC), which includes credit report, flood certification, settlement/closing, property ownership and encumbrances search, recording, property search, and quick close. Member is responsible for any city, county, and/or state taxes if the subject property is located in FL, LA, MD, MN, NY, TN, or VA. If an appraisal is required, the member, who is responsible for the fee whether or not the loan closes, will pay the cost.

Interest may be tax deductible, consult a tax advisor for further information regarding the tax deductibility of interest and charges.

Fixed Rate Advance Lock-In You may lock in an Annual Percentage Rate for Advances during the Draw Period. During your Draw Period, you may choose to have three separate Fixed Rate Advances locked in at any one time, with a maximum of two new Fixed Rate Advances per calendar year. Each Fixed Rate Advance must equal or exceed Ten Thousand Dollars ($10,000.00) and you may not request a Fixed Rate Advance that would cause the amount you owe to exceed your Credit Limit. The only term option for your Fixed Rate Advance is 240 months (“Fixed Rate Advance Term”). However, the term of your Fixed Rate Advance cannot exceed your Repayment Period.

Fixed Rate Advances will be amortized over the Fixed Rate Advance Term with the payment consisting of principal and interest. Your Annual Percentage Rate for a Fixed Rate Advance will be calculated by adding your Prime Rate, your Margin and the Additional Fixed Rate Lock-In Margin. Your Annual Percentage Rate for a Fixed Rate Advance shall not exceed 18% and shall be equal to or greater than % for primary residences and second homes and 4.75% for investment properties.

Property Insurance: Property insurance is required.

Multiple PenFed Loans: Multiple PenFed Equity loans and HELOCs are available as long as the member and collateral qualify (except Texas). For Equity loans and HELOCs the total indebtedness cannot exceed $500,000 for all PenFed Equity and HELOCs combined.

PenFed does not lend on:

  • Mobile homes
  • Co-ops or time-shares
  • Properties that are currently listed on the market for sale
  • Commercial property or property used for commercial purposes, even if a residence is part of the property
  • Undeveloped property (land only)
  • Properties with more than 4 units

Properties that are currently under major construction/renovations: Property must be fully livable, with no safety issues. (Examples: no missing rails from stairs/decks, no open walls with wires showing, missing kitchen appliances/counters, missing bath fixtures or unfinished pool).

  • Additional limitations may apply

Home Equity Line of Credit:

  • This Account has a Draw Period of 10 years, followed by a repayment period of 20 years.
  • If only minimum payments are made during the draw period, the loan balance will not decrease.
  • In Texas, the maximum CLTV available is 80% on owner occupied properties. Additional restrictions apply in Texas, so please ask a representative for details.
  • In all other states, the maximum CLTV is 85% on owner occupied properties and second homes. Additional restrictions or requirements may apply based on application characteristics.
  • Property type of Condo has a maximum CLTV of 80%.
  • The maximum CLTV available is dependent on credit qualification.
  • Rates vary depending on owner occupancy and CLTV and other loan criteria.

Minimum Loan Amount Requirements in all States:

  • For an owner occupied property or second home the minimum loan amount is $25,000 and the maximum amount is $500,000 with a CLTV of 85% or less of the fair market value.

Other terms and conditions apply; call 844-918-4307 to speak with a representative for details. All rates and offers are subject to change without notice. To receive advertised product, you must become a member of PenFed.

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This credit union is federally insured by the National Credit Union Administration. Rates are current as of October 2023 unless otherwise noted and are subject to change.

APY = Annual Percentage Yield
APR = Annual Percentage Rate


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The content you are about to view is produced by a third party unaffiliated to Pentagon Federal Credit Union. PenFed takes no responsibility for the content of the page.


IMPORTANT NOTICE

You are leaving PenFed.org and entering a third party site. PenFed Realty, LLC is wholly owned by PenFed and this referral may provide PenFed a financial or other benefit.


For more information about the relationship between PenFed and PenFed Realty, LLC, see the Affiliate Business Arrangement Disclosure.


IMPORTANT NOTICE

You are leaving PenFed.org and entering a third party Website.


The content you are about to view is produced by a third party website that is unaffiliated to Pentagon Federal Credit Union. PenFed takes no responsibility for the content of the page.


IMPORTANT NOTICE

You are leaving PenFed.org and entering a third party site. PenFed Title, LLC is wholly owned by PenFed and this referral may provide PenFed a financial or other benefit.


For more information about the relationship between PenFed and PenFed Title, LLC, see the Affiliate Business Arrangement Disclosure.


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