My realtor said I had to pay for house insurance one yr in advance, which on the closing day I did. But when I get my mortgage payment stub, on the Escrow account it says part of the payment will go to house insurance, why is that? Am i paying twice for it?
2007-10-30 09:27:13 · 7 answers · asked by Al 2 in Business & Finance ➔ Renting & Real Estate
You need to provide your mortgage company proof of your insurance. They will bill you for theirs until you prove you have your own.
2007-10-30 09:32:23 · answer #1 · answered by M L 2 · 0⤊ 3⤋
If it is paid a year in advance, then the payments are starting to be collected for next year.
Lets say your insurance is $600 per year or $50 per month. And you closed on September 1, 2007 and paid the first year in advance at closing, or $600 for 9/1/2007 through 8/31/2008. Your escrow is going to start taking out $50 per month right after that, so that by the time 9/1/2008 comes around and the next installment of $600 is due for the following 12 months, it is there in your escrow account.
2007-10-30 09:35:57 · answer #2 · answered by HEATHER 6 · 2⤊ 0⤋
Yes at the start it'll seem like you will be paying twice for it but it is advance money and then some of it will be held in escrow, so not to worry you are ok, just don't miss any payments.
RE:
Is it true I have to pay for House insurance one year in advance?
My realtor said I had to pay for house insurance one yr in advance, which on the closing day I did. But when I get my mortgage payment stub, on the Escrow account it says part of the payment will go to house insurance, why is that? Am i paying twice for it?
2015-07-06 21:43:23 · answer #3 · answered by Anonymous · 8⤊ 0⤋
You pay the first years policy up front, and then each month you escrow 1/12 of the payment. Now next year when it comes due again the mortgage co will have the money to pay it in full. Its not like they pay it monthly for you. They will now continue to do this each year for you, but if you didn't pay one year up front, they wouldn't have time to collect the proper amount. You are not paying twice.
Hope this helps,
RE Agent,
Remax
2007-10-30 13:33:34 · answer #4 · answered by frankie b 5 · 0⤊ 0⤋
You paid the first year at closing. For the next 12 months you'll be paying into escrow so in a year when the bill is due again, the money will be there to pay it. No, you aren't paying twice - the amount you'll be paying in your payments is for the NEXT year.
2007-10-30 09:55:07 · answer #5 · answered by Judy 7 · 1⤊ 0⤋
You pay for a policy (normally one year) in advance so you will be covered. Once you close you begin paying into an escrow account (unless you put enough down and chose not to have an escrow account). Next year when it comes time for your insurance to be paid again your escrow account will have enough in it to pay for a full year again.
2007-10-30 09:32:55 · answer #6 · answered by glenn 7 · 3⤊ 0⤋
No, you arenot paying for it twice. At closing you paid one year in advance. The payment you are making to the lender will enable them to have a sufficient amount in the escorw account when the premium comes due next year to pay the renewal.
2007-10-30 10:09:34 · answer #7 · answered by Anonymous · 0⤊ 0⤋
Yes, at closing the lender collects the 1st years premium for your homeowner's insurance. Then, each month you pay the monthly portion of your premium with your mortgage premium so when your homeowner's insurance bill comes due the following year the lender sends in the amount due.
2007-10-30 17:42:29 · answer #8 · answered by yourmtgbanker 5 · 0⤊ 0⤋
Yes, you do have to pay for House insurance one year in advance. You shouldn't be paying twice for it though. I think on the stub it's just showing you that you did pay for it. You should call your realtor if you're unsure though, he or she should be happy to help you and answer any questions.
2007-10-30 09:34:22 · answer #9 · answered by Amicita! 2 · 0⤊ 2⤋
That is correct. escrow likes to have that set aside once you buy the home, the same goes for taxes. you need to have a total of 7 months of taxes saved in escrow by the time your next tax due dt. you are not oaying twice for it they are just setting aside for your next year payment
2007-10-30 09:48:12 · answer #10 · answered by Anonymous · 1⤊ 0⤋