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Shopping for Homeowner's Insurance in the Mortgage Process

By
Mortgage and Lending with University Lending Group NMLS# 133950

Waiting to buy your Homeowner's Insurance until the last minute in the mortgage process can be a big mistake.  As a mortgage lender, I see it happen all too often.  Your loan is approved and then the Homeowner's Insurance agent sends over the Homeowner's Insurancedeclarations page and paid receipt right before we order your closing documents.  We lood at the premium and GASP because it is MUCH higher than we anticipated.  This causes the payment to jump and pushes the debt-to-income ratio higher.  Then the Homeowner's Insurance Hustle begins . . . everyone is frantically running around trying to find a lower premium.

This can be avoided by starting the hunt for your insurance EARLY in the process.  It doesn't hurt to shop around to be sure you are getting the best value.  Keep in mind that credit score, previous claims, and age and location of the home all play an important role in the amount you will pay for insurance as well as what insurance companies will be able to write the policy.

By starting early in the mortgage loan process, you can avoid last minute surprises.  Birthday surprises are fun!  Last minute mortgage surprises are NOT!   Most insurance agents can give you a quote without having a copy of the appraisal in hand with the understanding that it may adjust slightly once they view the appraisal report.  Keep in mind too that the days of getting a policy issued in a couple of hours have passed.  It will take two or three days for your policy to be issued once you have decided on an agent.

My advice?  Check out http://hartlandinsurance.com/ and talk to Joe Knopp.  Start shopping for your Homeowner's Insurance very early in the mortgage process - once you have a signed purchase contract is not too soon!

Posted by

Peggy Wilson

License #13950

734.238.3MTG (684)

peggy@peggyloans.com