In the midst of the current economic doom and gloom, many people are finding a silver lining. They are finally able to buy a new home of their own. As home prices drop and mortgage rates reach historical lows, you may learn that a mortgage payment is at or below what you are paying for rent. Bottom line: if you've got the money and good credit, now is a prime time for buying a new home or a second home as income property.
While you're shopping for bargains in real estate and mortgage rates, it's important to shop for the best price when you buy home insurance.
First Time Home BuyersHomeowners Insurance Checklist
As a first time homebuyer, you may be overwhelmed with the many tasks involved in home buying, from contracts and closing costs to inspections and earnest money. But the best way to avoid surprises and reduce the stress is to educate yourself and prepare.
This homeowners insurance checklist will help you know the steps to getting your insurance in line while also ensuring you buy home insurance with the best price and policy that fits your needs:
- Buy home insurance before closing. Know that your mortgage company will require that you have the policy in place prior to the closing of the home, and that you can shop online for homeowners insurance anytime, 24/7.
- Save time with multiple quotes. By shopping online for home insurance, you can receive and compare multiple insurance quotes based on the submission of one application. This enables you to get the best price and policy for your new home. If you're looking to buy home insurance, make sure to consider at least three Home Insurance Quotes
- Save money with multi-policy discounts. If you have a car or multiple cars, health insurance or other insurance policies, make sure to ask what discounts are available by rolling all your policies together with one insurance provider.
- Buying a townhome or a condo? A homeowner's Hazard Insurance policy on your property covers the principal balance on your home loan. When you buy a townhome or condo, this is typically included in your monthly Homeowner's Association (HOA) fee. But it typically covers only any damage done on the outside of the property and not the contents or personal liability. Make sure to work with the insurance agent to ensure all aspects of your property are covered, inside and out, and what you may want to have in terms of liability coverage.
- Going with an FHA Loan? If you are taking advantage of the low down payment option of 3.5% to 5% available in an FHA loan, know that you will be required to purchase Mortgage Insurance, or Private Mortgage Insurance (PMI), in addition to when you buy home insurance. This is required primarily for borrowers making a down payment of less than 20% and protects lenders against some or most of the losses that result from defaults on home mortgages.
- Where do you live? Different parts of the country can suffer from different acts of nature. Make sure to take this into account when you buy home insurance and consult your agent about protecting your home in the event of flooding, hurricane, fire, or even damage from an ice storm.
- Final details.
- The first year and subsequent years of your homeowners insurance is paid in advance through an escrow fund set up by your lending at closing, and is then rolled into your monthly mortgage payments.
- Once you decide on your homeowners policy, have your insurance agent contact your lender and title company to provide them with the necessary proof of insurance documents.
If you already own a home and want to upgrade, downsize, or buy a second home to rent out as income property, all the same money saving tips apply for when you buy home insurance for those properties. Even if you're not buying a home but are re-financing your existing home to save money, why not shop around for homeowners insurance as well? You may be pleasantly surprised at what you find.
See how much you could save today on your home insurance. Get your free home insurance quotes today!