Buyers! Don't forget your Home Insurance binder


Buyers! Don't forget your Home Insurance binder!

What is a home insurance binder? It's proof that you have purchased home insurance for the home you are buying. When you make your mortgage payment the first payment is 1/12 of the full year of home insurance for the following year. So think of it like it's a savings account for insurance. One of the out-of-pocket expenses is purchasing a full years worth of home insurance before you close on your new home.

It's one of three items that you will have to pay out-of-pocket. Typically this is not included in your seller paid closing costs. It's not to say that it won't happen but it all depends on what the lender will allow. You want to talk with your loan officer before shopping for home insurance to make sure you have a good idea of what is included in those seller paid closing costs.

Many of my clients have bundled insurance because they found that if they add their auto policies to their homeowners insurance they can save a significant amount of money. The other piece you need to consider is how much of a deductible do you want? And what is covered with that home insurance.

It's very important that you take the time to shop around with different insurance companies. It's amazing how vastly different the pricing and the coverage will be. This will really impact your bottom line and how much your monthly house payment is.

Tom Sommers 952-994-7204