Homeowners Insurance and Your Mortgage
So what does homeowners insurance have to do with getting a mortgage? In most cases, lenders will require you to have homeowners insurance to fund your mortgage. Because they have a financial stake in your home, lenders want to make sure they’re protected if, say, a hurricane levels the property.
How much you’ll pay for it varies depending on where you live, your deductible, the replacement cost of your home and more. The average premium for the most common type of insurance was $1,211 in 2017, according to a National Association of Insurance Commissioners report. Lenders typically fold the premium into your monthly mortgage payment, but you may be able to request to pay it on your own.
Like anything else, it pays to shop around. Look to your state insurance department, consumer guides, and referrals from friends and family to compare rates and get the best deal.