Ummm how do I pay you?
When we onboard new clients, we often spend quite a bit of time getting to know the client. This helps us understand the risk, their needs, and build policies around the client. Sometimes the process is so easy that we get to the end and clients will awkwardly ask…Umm, how do I pay you?
99% of the time it is through their escrow, and if they are first-time homebuyers they have NO idea what that entails. So let’s go over a few ways your homeowner’s policies are paid.
New purchase
Whether you are buying your first home or your tenth, homeowners insurance policies play a critical role to get you to closing. Underwriters have rules on how much they want you to pay per month of your expected income, which is why many of our loan partners will refer clients out to brokers like The Weikum Group.
At the closing table, your lender and the closing attorney will discuss “closing costs”. These include-
- Homeowners insurance for the first year
- Property Taxes
- Title Fees
- Home inspection & Appraisal Fees
- Loan & Lender fees
- Discount points
So the short answer is that you will pay the policy at closing. The closing attorney will take that money and issue payment to the insurance carrier on your behalf!
If you have any other questions regarding the other closing costs- we have a number of loan officers that are a great resource!
Refinance
Ideally, the loan allows for a paid in full bill to satisfy the requirement for insurance, and we name the new lender on the policy.
In rare cases, the policies come due near the closing date, and the lender will want to the client to pay for the homeowner’s policy at closing and wait for the old escrow account to close and refund the client.
Client paid
In some cases, the loan does not require the client to hold an escrow account or the client has paid off the home! Many of our clients pay their homeowners insurance directly to the insurance carrier. This can be done monthly, quarterly, semi-annually, or annually. There is also no discount for bulk payments (unlike auto policies) so if our clients are on a fixed income- they can pay their homeowners insurance monthly with no increased costs.
