Buying a new home... don't wait too long to begin shopping for your homeowner's insurance. As most loan officers do, when a client calls to "get pre-qualified" we estimate the payment amount for their homeowner's insurance. In most cases, my clients find coverage at or less than my estimates, until recently!
I have had two clients that have had premium more than double the estimate. This can have a huge impact on the borrowers total housing payment and ultimately the debt to income ratio. Clients that are pushing the limits on the debt to income (DTI) ratio might find themselves priced right out of their dream home.
Why is there so much of a variance in rates? Well, as it turns out I got a little bit of lesson on the subject. Insurance companies will establish insurance premiums based on employment, claims history, driving record and credit score. Oh and a big one is not showing up for a court appearance on a traffic ticket.
So, buying a new home, shop for your homeowner's insurance at the beginning of the process.
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