Homeowner’s insurance is a requirement regardless of the loan product you’re going with. As a soon-to-be homeowner, you’re going to want to save money where ever you can and homeowners insurance is a cost you can shop for!
I’d like to extend a warning your way though. Working with an insurance broker instead of directly with the insurance company can save you time, headache and close your loan on-time.
I’ve seen this time and time again. Sometimes clients choose to work directly with their insurance company to obtain a policy. While this is a totally fine option, it will prevent the lender from being able to obtain updates and changes without you present. However, if you’re using an insurance broker the lender can work directly with your broker on items they may need to close your loan on-time; and brokers can still shop to find competitive rates for you!
Below are a few examples of delays caused by working directly with the insurance company
- The client needs to reach out for a coverage adjustment or policy change
- The client needs to get a replacement cost estimator
- The client needs to make an adjustment to the replacement cost estimator
- The policy numbers aren’t correct between the policy and another policy document
- Additional items needed from the lender may need to be requested from the client
All this sounds pretty simple and basic, right? Well I’m sure you’d rather be doing other things than sitting on an 800 call for an hour, getting transferred a bunch and asking for something you’re not really familiar with. And when these items are required as a condition to fund your loan, I’m sure the stress will add to the fun!
The last thing you’ll want to deal with is a late closing when everything is riding on your loan going through. Working with a broker you can eliminate a lot of this particular frustration if it arises. It’s more common for these types of things to come up than you might think!
If you have any questions regarding this topic, feel free to reach out to me on my contact form!