Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
When a home buyer uses a “conventional loan” they are generally not required to use impound accounts to pay for taxes and insurance. Since many loans do not meet that criteria lenders require that the premium for the homeowner’s policy be collected in increments throughout the year along with other charges. The purpose for this is to make sure that the homeowner maintains coverage and protects the mortgage company’s interests.
That is a great question! It can be, as well as your taxes that you will owe, if there is an escrow account tied to your mortgage payment. Many people find that it is easier to have the mortgage payment be a little bit more each month so that those payments are accounted for, and in the case of taxes, not a big chunk to have to swallow all at once. I have mine set up that way, because my tax bill gives me a headache just looking at it, and it's much more palatable when it's a "paid" line on my mortgage statement. Thanks for asking!
Manager, Marindependent Insurance Services LLC, California
Home Insurance can be included in your mortgage payment if it is set up that way. However it is not necessarily included. Some people like to have their insurance and taxes paid via a escrow account which sits alongside your mortgage.
Another scenario is if you fail to maintain home insurance, the mortgage company can put into place forced placed home insurance. You should avoid this at all costs.
.JPG){kind=avatar}
Another scenario is if you fail to maintain home insurance, the mortgage company can put into place forced placed home insurance. You should avoid this at all costs.