How to Cash an Insurance Check Without Your Mortgage Company

Getting an insurance check to cover home repairs can be a frustrating process, especially when your mortgage company is involved. You may find yourself asking, “How can I cash this check without my mortgage company?”

I’ve been through this process a few times, so I want to share what I’ve learned to help homeowners understand their options when the insurance check has their mortgage company’s name on it

Why the Mortgage Company is on the Check

First, it’s important to understand why the mortgage company needs to be involved at all.

When you have a mortgage, the lender has a financial interest in your home They want to make sure that if there is damage, you use the insurance funds to repair the home and protect their investment

That’s why if the check amount exceeds a certain threshold, often around $10,000, the mortgage company requires their name on the check too. This means you can’t just cash the check without getting their approval first.

The threshold amount can vary by mortgage company. The range seems to be between $5,000 to $20,000 based on an informal survey of several major lenders. Check your mortgage paperwork or call your lender to find out their specific limit.

Your Options for Cashing the Check

Now that you understand why the mortgage company is involved, let’s look at your options for cashing an insurance check in their name:

Get the Mortgage Company to Sign Off

The simplest option is to just work with your mortgage company to get their approval. Here are the typical steps:

• Contact the loss draft department at your mortgage company. Explain you have a check for repairs that needs their signature.
• They will send you a packet outlining their requirements. This varies by lender but may include:
  • Copies of damage estimates/quotes
  • Signed contract with your contractor
  • Final invoice when work is complete
  • Lien waivers from contractors
  • On-site inspections
• Provide the documentation they require. This can be annoying if your mortgage company wants final invoices before releasing funds, but it’s the quickest path to getting their approval.
• Once approved, the mortgage company will sign the check and return it to you.
• You can then deposit the check into your own bank account.

So this option is simple in concept, but satisfying the mortgage company’s requirements can take some time.

Request Two Checks

If you want to avoid the hassle of getting mortgage approval, you can contact your insurance company and request they cut two separate checks:

• One check for you up to the threshold amount your mortgage company allows. For example, $10,000.
• A second check naming both you and the mortgage company for the balance.

This allows you to quickly cash the small check made out to you only. You can use those funds to start repairs or pay your contractor’s deposit.

Then go through the approval process with your mortgage company on the larger joint check when needed.

Having part of the funds readily available can be handy, but you will still have to follow your lender’s requirements on the bigger portion.

Cash the Check at Your Own Bank

Here’s an outside-the-box option that sometimes works:

You can try taking the joint check to your own bank, without the mortgage company’s approval, and ask them to cash it.

Why might your bank do this?

• You have an established banking history with them.
• It’s a cashier’s check from an insurance company, so no risk of bouncing.
• The bank can immediately recoup the full amount from your account if any issue arose.

Of course, the bank is under no obligation to cash the check without proper endorsements. But it never hurts to ask!

I’ve heard of this working for a few lucky homeowners. But don’t get your hopes up too high.

Forge the Mortgage Company Signature

I have to mention this is an option, but it’s illegal. Forging a signature is fraud. Don’t do it!

But you might be tempted if your mortgage company is being extremely difficult to work with. I don’t recommend it, but I understand the frustration that could drive someone down this path.

If you get caught, you could face criminal charges for check fraud. It’s just not worth the risk over home repairs.

Refinance or Pay Off Your Mortgage

If you really want to avoid dealing with your mortgage company anytime you have repairs, you could refinance your mortgage and take them out of the equation.

Some homeowners choose to do a cash-out refinance when they have major renovations planned. This puts money from the mortgage payoff directly in your pocket.

Or you could look at options for paying off your mortgage early if you are far enough along.

Either of these would get the mortgage company off the insurance checks for future repairs. But of course, refinancing has costs, so run the numbers carefully.

Tips for Smoother Processing

Based on my experience cashing these joint checks, here are some tips to make it easier:

• Call the mortgage company as soon as you receive the check to get the process started. Their requirements can take time, so start early.
• Be responsive providing all documentation they request. Quick responses will help speed up their approval.
• If they require on-site inspections, schedule these right away and accommodate their inspector’s availability.
• Ask if they will release some funds early or provide partial approvals through the repair process. Even releasing half upfront can help.
• Escalate to a supervisor if your contact seems difficult to work with or is delaying things unnecessarily.
• Get everything in writing from your mortgage company, so you have documentation in case of any disputes.

The better you understand their process and requirements, the faster you can get the necessary approvals and access your insurance funds.

Explore Alternatives to Cash

One final tip is to look at alternatives to getting the check cashed for your repairs:

• Will your contractor accept the joint check from the insurance company as payment directly? This avoids you having to cash it yourself.
• Can you pay your contractor another way, like credit card or personal loan? Then you only need to cash the joint check once repairs are complete and contractor paid.
• Is your contractor willing to wait for payment until after mortgage company approval goes through? Offer to pay interest for the delay.

Getting creative with payment methods can help work around the headaches of a joint check.

It’s Possible, Just Annoying

As you can see, it is possible to cash an insurance check without your mortgage company’s involvement, but it will likely involve some extra steps. If the check is small enough, you may be in the clear. For larger amounts, you’ll have to go through their approval process.

In the end, the mortgage company just wants to ensure repairs get done, protecting their investment in your home. Once you provide the necessary reassurances, they will sign off on the check. It’s an annoying hoop to jump through, but totally doable with some patience.