Do Homeowners Insurance Requirements vary by Mortgage Lender?

Do Homeowners Insurance Requirements vary by Mortgage Lender?

Member since 2019 · 10 posts · 2 votes

I have an unusual question about the Homeowners Insurance required when you get a mortgage. Do the requirements vary by lender, and if so, is the difference significant enough that I should factor that in when shopping for a mortgage?

Here's my scenario. I'm looking to purchase my first home for myself. I'll be living in it, not flipping it or renting it. I intend to stay there, well, probably forever. As I'm shopping for the best deal on a mortgage based on closing costs and interest rates, should I also find out what the exact homeowners insurance requirements are for each lender and compare the cost difference? The way I see it, if one lender makes me get more coverage than I would want and that costs me $10-15 per month more than the coverage required by another lender that can be a bigger difference than a very small variance in interest rates.

Does it make sense to investigate this before picking a lender? Or are the insurance requirements very standardized so there would be almost no variance from lender to lender?

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  • Alex BekezaBusiness Member
    Lender · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes
    6y

    @Jason King Yes, different lenders have different insurance requirements.  The difference should usually not be significant enough to affect your decision.  You should still go with the best rates and terms as whatever minor change to your insurance premium that ends up being required would be negligible in comparison. 

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