We all get caught up in the "house buying circus" and often lose sight of things that could/should be looked into further for our financial sanity...like homeowners' insurance.
Everyone knows " you just have it escrowed and it's part of the payment", but is it? Short answer yeah...no, but kinda?
What does escrow mean for you? Keeping it simple, your mortgage holder takes a year to 18 months of your monthly insurance payments at closing and pays your insurance company for the first year, they then charge you the monthly insurance rate each month in addition to principal and fees, then each year on the annual insurance due date they pull from your escrow account paying the next years bill.
What if I want to change insurance companies for a better deal or more coverage? No problemo! When you decide on your new insurance company and sign with them they take it from there! Like a brick to Deebo's head we "knockout" the hassle for you. How can we do that so calmly you ask??
Same as was done in the closing really. We send a "binder" (AKA the bill) to the mortgage company and they send us the payment. The only booby-trap here will be when the old insurance company sends you a refund check... as fun as it would be.... DO NOT SPEND THIS! That check must be put back in you escrow account. Most handle this by depositing it and for there next mortgage payment they send their regular payment and a payment that is clearly marked ESCROW ONLY. Those that pay online can just select the escrow only or additional escrow options on there mortgage payment screen.
When in doubt never hesitate to give your agent a call or shoot them a message and they are always happy to help (or they should be, I mean we are ;-) )!
Comments