5 Tips to Save First Time Home Buyers Money on Homeowners Insurance

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Homeowners insurance is required when getting financed for a home mortgage loan and buying a house. Not only does it protect the lender, it protects you, the buyer, in case something terrible like fire happens. So keeping the fact that it’s mandatory in mind, first time home buyers may want to plan out how to make it affordable. Saving money is always great!

Let’s take a look at a few tips we dug up to save money on your insurance.

1. One thing a first time home buyer can do is to bundle insurance policies. You have a car so you most likely have it insured. Maybe you have renters insurance. A lot of people have life insurance. Check with your current insurance company on homeowners insurance, to see if keeping the policies together will save a few bucks.
2. You should consider the deductible. The higher deductible you have, the lower your monthly payment should be. This means if something happens, you will have to pay more out of pocket. But with lower monthly payments, you can build up a savings as a back up plan. Keep in mind there's rule that the max deductible is 1% of the loan or $1,000 (whichever amount is greater). So talk to your loan officer on for advice.
3. As with any purchase, take time to price shop. Checking with your current insurance company is a great place to start. However, an informed consumer has the means to possibly save some coin. If you know the going rate for insurance, you should be able to get the best rate.
4. Ask about discounts. You may get a discount based on your neighborhood, or through a membership you have. Safety discounts may apply. You don’t know until you ask.
5. Your credit score may affect your insurance cost. Ask your insurance provider whether your score has any effect on your premiums. You may be able to bring your score up in a short time with some fairly simple fixes. We talked about credit score resources in a previous post.

So as you look at houses, keep in mind you’ll need to roll homeowners insurance into your payment. Talk to a mortgage adviser about your buying power. Let us know how we can help.

(photo: AMagill)