Prepaid Homeowners insurance

As a term of the mortgage we had to pay 1 year of home owners insurance in advance. Do we still have to pay home owners insurance for the rest of the year?

Anyone understand what I mean..I hope we are not the only ones.

Re: Prepaid Homeowners insurance

we have something similar, and i still don't quite understand why we are doing this ...

we paid for 1 year and now make additional payments towards next year each month. i think it's stupid and i don't know what the reasoning behind it is, but DH told me we needed to do it this way for one reason or another.

we also pay our taxes on a monthly basis and the bank supposedly pays them quarterly for us - don't like it, don't understand it, but DH took care of it and that's the way we have things structured currently

Re: Prepaid Homeowners insurance

We pay our insurance directly to the company. So we paid for the full year in June 04 when we closed and now we just paid another full year last month! We made no payments in between!

Re: Prepaid Homeowners insurance

Its really up to you whether you want to pay the bills each year or the mortgage company.
You have to show them a paid receipt for one year at closing. If the following year, you want the mortgage company to pay it for you, then you have to make your monthly payments and have the money in your escrow account.
I work for an insurance company. I know sometimes when the Insurance rates go up, if you for some reason dont get notified, then your mortgage payment will go up and you may not realize why....So, I'd prefer to take care of the insurance myself.
Also, if you do it yourself, after the first year, you can just pay it monthly or quarterly instead of the whole year in one shot.

If you want more info, FM me!

Re: Prepaid Homeowners insurance

We paid 100% directly to the insurance company just prior to closing and we are covered for the year. We only pay mortgage and taxes to the bank each month.

Re: Prepaid Homeowners insurance

We paid a year up front before closing and then we still have them in our mortgage payments. We were told that we have to do it this way. It goes into escrow. It doesn't make sense to me.

Re: Prepaid Homeowners insurance

We paid for a year upfront prior to closing. BUT we still have to put money into escrow each month towards the renewal. It's annoying- we are already paying for next year!

ETA: This was a condition of our mortgage, we also put money into escrow each month for the taxes.

Re: Prepaid Homeowners insurance

A lot of mortgage co's make you pay your homeowners insurance through your mortgage--this is to cover their a s s if something happens to the property, and nothing more.

As for the original posters question, when your mort. co. makes you pay through the mortgage it works like this: You pay upfront for an entire year, and bring proof of paid homeowners insurance to the closing. Then, even though you're covered for the year, you have to pay homeowners ins. in your mortgage each month. That is to make sure that after 12 months the mort. co has enough money in escrow to pay the following year's ins. So basically they always have extra money of yours in the escrow acct.

I was told that usually after 1 year (when you mortgage has this as a contingency) you can take the insurance and the taxes out of your mort., and pay them on their own. Until then, if this is how your mort. is set up, you really don't have a choice.

Re: Prepaid Homeowners insurance

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Posted by FTRBRIDE

A lot of mortgage co's make you pay your homeowners insurance through your mortgage--this is to cover their a s s if something happens to the property, and nothing more.

As for the original posters question, when your mort. co. makes you pay through the mortgage it works like this: You pay upfront for an entire year, and bring proof of paid homeowners insurance to the closing. Then, even though you're covered for the year, you have to pay homeowners ins. in your mortgage each month. That is to make sure that after 12 months the mort. co has enough money in escrow to pay the following year's ins. So basically they always have extra money of yours in the escrow acct.

I was told that usually after 1 year (when you mortgage has this as a contingency) you can take the insurance and the taxes out of your mort., and pay them on their own. Until then, if this is how your mort. is set up, you really don't have a choice.

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Never knew this! Good read.