PURCHASING A HOME? YOU NEED HOME OWNER INSURANCE

PURCHASING A HOME? YOU NEED HOME OWNER INSURANCE.

 

A common question I get as a mortgage broker is "when do I need to buy a home owner insurance policy for the home I'm buying"? Or, "who is responsible for providing a home owner insurance policy?".

 

When purchasing a home the lender will require you get a home owner insurance policy that will cover the home the first full year. You do not pay monthly on home owner insurance when you have a mortgage on the property. The first year is paid up front at closing from the buyer's funds or the seller paid costs.

It is important to begin shopping for a policy as soon as you get your documents submitted to the lender for processing. Insurance shopping can take time and you do not want to hold up the closing because you do not have the home covered.

  • The insurance policy you purchase must be effective the day your close or sooner.
  • You cannot close earlier than the date on the policy
  • You can shop any time for the policy and choose a carrier weeks even before closing. Simply make the policy effective the date you desire to close.
  • You may choose any insurance carrier you want. You are not forced to use any particular company.
  • If you have adequate seller contributions you can use these funds to pay for the policy at closing if  your insurance company allows it.
  • You must have a home owner insurance policy, a quote is not what the lender is looking for. You will need to tell the insurance company to write the policy. 

It is very important that you begin asap to shop around for home insurance. It often is the one item that causes delays in the process because the lender cannot finalize your costs and get a closing disclosure out until all costs are fully revealed.  So, it is never too early to begin the process.

Comment balloon 2 commentsDora Griffin • March 29 2018 02:04PM
PURCHASING A HOME? YOU NEED HOME OWNER INSURANCE
share
PURCHASING A HOME? YOU NEED HOME OWNER INSURANCE. A common question I get as a mortgage broker is "when do I need to buy a home owner insurance policy for the home I'm buying"? Or, "who is responsible for providing a home owner… more
DO I NEED TO GET AN APPRAISAL?
share
DO I NEED TO GET AN APPRAISAL? Quite often I am asked by home buyers and sellers "do I need to get an appraisal? ". My question is why do you think you need one? If you are utilizing the services of a professional real estate agent they… more
I CAN'T IMAGINE DOING IT WITHOUT YOU.
share
I CAN'T IMAGINE DOING IT WITHOUT YOU. That is what I heard from a buyer I recently helped with a mortgage loan for his first time home purchase. All transactions make us feel really good when they are finished and our client is happy. We always… more
DOES YOUR HOME QUALIFY FOR AN APPRAISAL WAIVER?
share
DOES YOUR HOME QUALIFY FOR AN APPRAISAL WAIVER? What is an appraisal waiver?? An appraisal waiver is when the lender is not requiring an appraisal be done on your property before making a mortgage loan to you. Benefits of an appraisal waiver:… more
ALL LENDERS ARE NOT CREATED EQUALLY
share
ALL LENDERS ARE NOT CREATED EQUALLY I recently experienced a situation where the title of this blog "all lenders are not created equally " proved costly to the home buyer. A past client called me about her son who was trying to purchase… more
VA HOME LOANS, A GREAT ZERO DOWN OPTION
share
VA HOME LOANS, A GREAT ZERO DOWN OPTION VA home loans are a great option for veterans or surviving spouses when it comes to down payment needs. VA home loans are available with no money down to eligible veterans. One of the biggest problems folks… more
WHAT PAPERWORK DO I NEED TO KEEP AFTER MY HOME CLOSING
share
WHAT PAPERWORK DO I NEED TO KEEP AFTER MY HOME CLOSING What paperwork do I need to keep? I had an email yesterday from a long time repeat customer who asked this question. Over the last decade or more I have helped them with a purchase, a… more