Homeowners Insurance & Closing Costs: What to Expect

When you're getting ready to close on a home, it might come as a surprise that you're required to pay a 12-month homeowners insurance premium upfront. Even though you’ll be making monthly insurance payments as part of your mortgage, this upfront cost covers your first full year of coverage—think of it as paying for January 2025 through January 2026 all at once.

The good news? You can use a credit card to pay this amount if you’d like to reduce the total cash you bring to the closing table. After that first year is covered, your monthly mortgage payments will continue to include homeowners insurance moving forward.

Still have questions? Our team at Cream City Mortgage is happy to walk you through each step of the process. Reach out!