You’ve had some damage to your home, and you’ve worked with your homeowner’s insurance to get the coverage you’re due for the damage. You’ve gone through the process of finding a contractor to do the work, and now comes time to begin to pay for the repairs. Your insurance company has sent you a check, and as you open the envelope, you see a check made out to… your mortgage company?

So, now your insurance company has sent you a check for home repair that you cannot just take to your bank and cash, obviously, for your name and the bank’s name is on it. How can you turn that check into usable funds so that you can pay your contractor to fix up your home? You have to contact your mortgage company and begin the process of cashing that check.

WHY IS THE CHECK NOT MADE OUT TO ME ONLY?

cash check mortgage

If it’s not made out to you, only, but rather to you and the mortgage company, that owns a part of your house, then they may have some dollar amount limit concerning repairs and who the check needs to endorse it. For many companies, the cutoff is around 10,000 dollars; if the repairs are cheaper than that, the check will not need endorsement from the mortgage company, but if they cost more, the check will.

The reason that this happens is because the mortgage company is part-owner in the house, and they have an interest in making sure you take care of it. If you’re married and both on the homeowner’s insurance policy, the check would include both your name and the name of your spouse. Any party whose name appears on the check must endorse the check before anyone can cash it.

CONTACTING YOUR MORTGAGE COMPANY

If you have a check from your insurance company that requires endorsement from the mortgage company, the first thing that you should do is contact your mortgage company. To be specific, you will need to contact their ‘loss draft department’. When you get hold of someone at the loss draft department of your mortgage company, you will want to ask them what their procedure is, because there are many different procedures for getting the check endorsed and cashed.

THE PACKET AND CASHING

Shortly after calling the loss draft department and informing them of the issue, they will usually email you a packet, and that packet is basically the requirements before they will endorse the check.

For some mortgage companies, the process will be simple. You come in and show a copy of your loss, you show a copy of the contract from your contractor for the work, and the company will sign off on the check. This is the best-case scenario.

In some cases, you will need to have a final invoice from the contractor. In some cases, they may even want a conditional lien waiver from the contractor. Some mortgage companies may even go so far as demanding an affidavit from the homeowner that they will fix the damage or an affidavit from the contractor stating the same.

Still, other mortgage companies may want to do an inspection of the work, and so as part of their process, they will send out an agent to inspect the completed work (or, if the project is large, they may come out and do an inspection mid-project).

Some companies will even go so far as to hold the money in escrow, releasing it in parts or at the end of the work. At the end of the day, the process is up to your mortgage company and what they want to do.

So, if you get a check from your insurance company that is made out to your mortgage company as well as yourself, now you know what to do to in order to release those funds for the purposes of covering the cost of repairs. The quicker you set about the process, the quicker you can repair your home.