Purchase Homeowner’s Insurance Before Closing on Your New Home
You have made the decision to buy a new home which is likely one of the most important and largest investments you will ever make financially. Protecting your new home with homeowner’s insurance is important to you, and by law you are required to maintain homeowner’s insurance at all times, but do you need to purchase homeowner’s insurance before the closing on your new home? The answer is a definitive yes as not only will homeowner’s insurance prior to closing be required by your lender, but also provides advantages to you financially.
Mortgage Lender Requirements for Homeowner’s Insurance
Any asset-based financing, such as a new home loan, requires proof of insurance based on U.S. financial institution laws and best practices. This means that prior to attending the closing on your new home, you will need to secure homeowner’s insurance and documentation proving the acquisition of the insurance. Homeowner’s insurance should be purchased for the full asset value of the new home in order to meet lender obligations customary at closing. Additionally, you will want to have documentation on your insurance premium payment schedule from your chosen homeowner’s insurance provider as you may wish to escrow your homeowners insurance payments in conjunction with your mortgage payments, thereby spreading out the cost of your homeowner’s insurance payments and reducing the impact of lump term payments.
Benefits of Buying Homeowner’s Insurance in Advance of New Home Closing
While closing on a new home is a hectic time and adding the decision making for choosing homeowner’s insurance may seem like just one more item on a long to-do list, there are decided advantages to purchasing homeowner’s insurance in advance of closing on a new home. By purchasing in advance, you will be able to work with a trusted insurance agent to thoughtfully evaluate the coverage that you need to best protect your new home and personal belongings. Making the decision in advance of closing will also give you security and confidence that you are financially protected from the minute you take the keys to your new home – thereby allowing you to fully enjoy the purchase of your new home for the major life event that it is.
If you are interested in evaluating homeowner’s insurance policies that will be protect your new home purchase, let us help. Call 714-258-2800 or 888-725-7776 to receive a free consultation and no obligation quote.