"What is homeowner's insurance?" It is insurance that protects a homeowner against loss from fire and other hazards that may impair the value of their home. "Is homeowners insurance a settlement cost that must be paid upfront?" Yes, it appears on the Good Faith Estimate as an estimated amount, and the actual amount is shown on the HUD1, which is the closing document that lists all settlement costs. It is not a mortgage cost, but lenders require that their "minimum insurance requirements" be met before they will fund a loan. The house is their collateral, and they don't want to lose it to a fire or other catastrophe. The insurance requirements vary from lender to lender but on a house purchase, most require that the premium be paid for the first year at closing. If the borrower i...
Get Inman via Facebook Messenger
Our top headlines delivered once a day.