Homeowners Insurance in Lawton, Oklahoma

If you are buying a home in Lawton, Oklahoma there are a few things you should know about homeowners insurance.

• If you have a loan, the lender will require you to insure your house for at least as much as you will owe on it.  However, this amount may not be enough coverage to protect you. 
• In general, you should insure your home at replacement cost(the cost to re-build your home at today's prices)
• In many cases, replacement cost will be more than what you finance on your home. 

How insurance can affect your loan approval

Lenders consider your insurance premium to be part of your monthly financial obligations.   In other words, they factor whatever the monthly insurance payment is as one of your bills.    Your total monthly bills affects your debt ratio, which is a significant part of your loan approval.  

When a loan officer gets you pre-approved, he or she is supposed to factor in an amount for your homeowners insurance and property tax.   Unless the loan officer gives your information and the property information to an insurance agent and gets an official  quoate, the loan officer is guessing at the insurance amount and your pre-approval might not be valid.  

Why????

If the loan offier estimates the insurance premium too low, your pre-approval is based off of a debt ratio that is lower than what it should be.    Many times, a loan approval decision can be swayed one way or the other by a very small change in debt ratio.    

Before your loan can close, the lender has to be show evidence of insurance, including the exact yearly premium.   If the premium is higher than what the loan officer has represented, the lender will compute the new debt ratio and see if the borrower still qualifies.    Unfortunately, this is usually done at the last minute and can be a recipe for disaster, or at the very least a lot of unnecessary stress.  

As a borrower, the best thing you can do is to make sure that you have an accurate insurance quote early in the loan process based on not just the property information, but on your personal information as well.  

We provide accurate homeowner's insurance quotes within minutes.