Prepaying homeowners insurance

micheleszabo13 · Joined: 18 Jan 2008 Posts: 1 1.28 Dollars($)

I have prepaid my mortgage insurance for the first 12 months. I want it included in my payment. My question is iwhy did I need to prepay if it is going to be included in my monthly payment

jenkin7 · Joined: 04 Jun 2007 Posts: 939 140.80 Dollars($)

Hello Micheleszabo,

Welcome to the forum.

Lenders generally require the mortgage insurance for the first year to be paid at the time of taking out the loan.

For the next 2-3 years or as long as it is required in your case, it has to be paid along with the monthly installments till your principal comes down to 80%.

I hope this helps you. Feel free to ask the community for any further query.

lisascherzer · Joined: 04 Jan 2008 Posts: 755 1.03 Dollars($)

Here is the reason: You make your payment for the first year. For the next 12 months your lender will collect 1/12 of the payment for your homeowners insurance. In one year, when it is time to renew your policy, the lender pays for another year. Homeowners insurance is paid in advance so the lender needs to collect for one year before being able to pay the next years premium. Hope I answered your question.

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