One of the chief requirements of closing the deal on a home mortgage is buying a home insurance policy. New home insurance doesn’t only benefit you, after all. The bank who’s financing your mortgage has a substantial stake in your home too, and taking measures to ensure that investment is is protected is one of their primary concerns.
What happens if I don’t get home insurance?
When it comes time to finalizing paperwork for your mortgage, the bank or lender will require you to provide proof that you’ve taken steps to insure your new home. In the event that you don’t secure new home insurance through the insurer of your choice, your mortgage company may do one of two things: hold up on closing until you’ve obtained an adequate insurance policy, or provide you with a policy of their own.
Is lender provided home insurance better?
In a word, no. The coverage you’ll get from a lender-provided home insurance policy will only differ from a policy you obtain on your own in out-of-pocket costs to you. Typically, the home insurance coverage that your mortgage company will purchase for you is far more costly than what you’ll be able to get on your own. Premiums are added to your monthly mortgage payment and could significantly raise the total amount of money you pay.