When you purchase your first home, if you are using a mortgage lender to finance your investment, you'll learn that your property taxes and home insurance fees are going to be included in your monthly mortgage amount.

Property taxes are paid in arrears and homeowners insurance is paid in advance. So… when you first purchase your home, you will have already secured an insurance policy and that amount will be factored into your monthly payments to the mortgage company moving forward. Then, each year, you have the right to shop out your homeowner's insurance prior to renewal, but if your premiums increase for the upcoming year, so will your mortgage payment.

So for example, let's say you have a current homeowner's insurance policy that costs you $2,400 per year. Then, as you come up to your renewal date, you find out your premium is going up to $2,800. That means that extra $400 will be divided between the 12 months in your next year of mortgage payments and increase those payments by about $33 per month. In addition to that, if the estimated property tax amount was higher or lower than anticipated the year prior, your payments will also reflect that change.

Knowing that your mortgage payments will likely change from year to year, we can understand why you would want to know what that new payment will look like as soon as possible. And while we CAN help you re-shop your policy annually (and hopefully get you a comparable or better rate), we won't know what your new mortgage payment will be, because other variables will contribute to that number (like the previously mentioned property taxes). You'll want to get in touch with your mortgage lender to find out what your new payment will look like once insurance and tax changes are factored in.

So each year, after you've worked with us to secure the best property insurance option for the coming months, your new carrier will notify your mortgage lender directly of the rate change and your lender will then readjust the mortgage payment amount accordingly. Of course you will eventually be notified by mail with your new payment coupons, but if you want to know sooner, feel free to call your mortgage lender directly, anytime.

Meanwhile, as always, if you have any questions about your property insurance - or want to talk about making adjustments to your coverages - just give us a call. We're always happy to assist!