I wanted to bring to you guys today’s tip of the day. I work with many first-time home buyers, and one of the primary questions that I always get as we’re going through getting them the right home insurance and getting it set up is how do I pay for this? How escrow account work for home insurance?
How do I pay for home insurance?
Jason, do I give you a credit card? What do we need to pay for it monthly? And the answer is no, as you’re going through the home buying process. Most mortgage companies want to make sure and have the conditioner requirement that you keep insurance on your new property, on your home, on the investment they’re taking into you.
Escrow Account
They want to make sure that you have it insured. So in many cases, what most mortgages do is set up an escrow account for you, and escrow will pay for your home insurance. Typically, when we have a first-time home buyer, they will pay for their first year of home premium through their closing costs.
How escrow work
It is something they’re going to pay for upfront, but it’s going lumped into the closing costs that they’re already working with their lender, and then each month, a portion of their mortgage payment is going when to be for escrow. Escrow is for insurance and taxes. The escrow will, then each year, accumulate money each month, and then each year, it’ll pay your taxes.
It’ll also pay out your insurance, so if you have any questions on how. You know, insurance works along with your escrow, or it’s something that we’d look at. Even when we move somebody over into our insurance company, midterm is how we handle that escrow account. We’re super-duper confident about handling that here at 303 Insurance Brokers, and feel free to reach out to us with any questions.
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