In order to close on your new home you will need to provide proof of actove insurance. Typically the loan includes the cost of insurance and you will not need to pay out of pocket. In some cases the insurance agemtay require a down payment on the policy in order to issue an insurance policy.
If the agent requires a down payment, the cost is usually only 10% of the annual policy premium. This could be as low as $50 or as high as $200. Early in the process of buying a house you should start shopping for insurance to make sure you get the most affordable coverage possible.
The cost of insurance isn’t everything! Make sure the policy covers the cost to rebuild the home in the event of a fire or other disaster. Keep in mind that homeowners insurance is not meant to cover maintenance items. If your roof wears down and needs to be replaced, the insurance will not pick up the tab. It is the responsibility of the homeowner to maintain the property condition.
If you would like information on reputable insurance agents in your area we would love to speak to you. We can help you start the process so you know exactly what you will spend before you start the process. Out team has decades of experience and make every effort to help our clients not only understand the loan process but all understand the responsibility of homeownership.
So now you know the possible out of pocket costs even if you are applying for a no money down home loan. Every home has a different closing cost calculation so make sure you discuss your specific situation with your loan officer. 100% financing does not always mean “no money down”. Work with a mortgage professional than explain the unique numbers on every home you are interested in purchasing.