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Can Homeowners Insurance Be Included In Closing Costs?

Carlos Navarro: Hey, guys, it’s Carlos Navarro, with Navarro insurance Agency. I’m actually creating this channel to go ahead and answer some of the questions that we get most frequently asked, or the ones we see customers struggle with the most. The question is, who takes care of the payment for your homeowners when you’re purchasing a house through your lender? The answer for this, actually, can go a few different ways. Most of the time that we actually go ahead and talk to a lender or that the customer’s actually going through a lender if they don’t know that answer that likely means that they’re actually gonna go ahead and actually have the lender pay for the homeowners at the time of closing.
Think about it this way … if you’re the bank, the bank wants to take care of its investment. They’re loaning you the money but they’re basically investing in you, investing in you purchasing that home. That’s basically how they make their part, right? The last thing that a bank wants to do is actually let you go ahead and get your own insurance or do things separately, because they don’t know if you’re paying for your insurance. They don’t know if you’re paying for your taxes so they like to use, basically, escrows. This actually works out pretty great. The way the bank actually takes care of the payment for your homeowners is that they actually pay the whole year in advance.
If you know anything, like car insurance, paying in full option’s always better, so having your bank take care of the payment for you is actually a huge benefit for you in the terms of actually getting the best deal, because you’re paying the monthly payments to the bank then the form of escrow is your monthly payment but that’s your bank is actually saying they want the payment in full at the beginning of the year. Simply put, the escrow, if you’re buying a house, you’re wondering who’s gonna take care of your homeowners payment? The bank is. You still want to get the best offer since at the end of the day you are going to be making monthly payments towards that payment, but at the end of the day you don’t have to worry about forking out anymore money at the time of closing. Thank you. Have a great day, guys.