- June 25, 2011 at 4:29 am #33095
adminParticipantJune 25, 2011 at 5:04 am #145500
lenders require a paid policy at close for 12 months. yes. depending on the lender, sometimes you can roll it in to “seller paid closing costs. “June 25, 2011 at 5:48 am #145501
Yes, a full year. If you have a reserve account for taxes and insurance add 2 months to that as the lender doesn’t want to chance your policy expiring while they wait for that last payment next year from you so that they can remit the renewal.June 25, 2011 at 6:21 am #145502
should be able to pay monthlyJune 25, 2011 at 6:58 am #145503
If you are going to be ‘escrowing’ your taxes and insurance than yes. You pay the first year. Then part of your monthly payment is held in a separate account and builds up so that when they receive the bill next year for the insurance they have enough money to pay it.June 25, 2011 at 7:34 am #145504
Lenders will require that you insure your house for 1 year up front. The lender will want to see your insurance binder prior to closing. It may be paid at the closing.
In addition if you escrow for your homeowners insurance, the lender will generally collect a 2 month cushion.
A couple of more things. A lender is going to want to see that the home is insured for at least the loan amount. Some insurance agents do not want to do this. If they don’t, then the lender will require that the insurance binder states 100% Guaranteed Replacement Coverage.
If you have any questions or would like some more detailed questions, I would be happy to help.June 25, 2011 at 8:27 am #145505
Only if the insurance premium is being escrowed.
If not, then no. It’s the LENDER requiring that, not the insurer.June 25, 2011 at 9:16 am #145506
Unless you’re buying the home outright with no mortgages the lenders will require you to have home insurance. At closing the policy will need to be paid in full for the first year.
Which means you can pay the insurance yourself before closing, or, you can include the insurance as part of your closing costs (which means the money you bring to the lawyers office at closing a portion or all of it will go to pay the hazard insurance) at which point the closing attourneys later send out a check to the insurance company, or, the cost can be included as part of the financing package and a check for the insurance is later sent out by the lender to the insurance company.
If the home insurance is being escrowed (payments included in the mortgage) then the first years premiums are paid (using on of the above methods) but the premium for the NEXT year is being collected throughout the current years mortgage payments.
Hope this helps.June 25, 2011 at 9:56 am #145507
Most lenders will require you to show proof of property insurance at or before closing the escrow.
The requirements for property insurance is totally depend of what is the insurance requirement policy is for that specific lender.
in case of payment of insurance, Yes you have to pay it up front and the reason for that is that the finance company want to be sure that you have insurance for the first year and you are not going to forget making your insurance payment.
in most cases escrow will pay the insurance premium and collect it from the client at the closing, however some escrow companies put the insurance premium on the loan amount.
Hope it was helpful.June 25, 2011 at 10:42 am #145508
That depends on your lender. Most mortgagees require one year of insurance paid at closing, but not all of them do. They usually include the first year’s insurance premium in your closing cost.June 25, 2011 at 11:03 am #145509
yes its mandatory for a mortgage to be written (and then its goes into that ripoff escrow after that)June 25, 2011 at 11:26 am #145510
If you have an escrow account then the mortgage company will pay the full year, but only charge you monthly. You may want to try a website that compares multiple companies at once to get you the best price. I am paying less than ½ after I did.
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