Why Do You Need Homeowner's Insurance When Closing On A House?

If you are currently shopping for a house to buy, the day you will look forward to the most is probably the day you close on the house. This is the day you take possession of the house, and this is the day you become a homeowner. When you attend closing, you will need to have proof of homeowner's insurance for the house, and here are the reasons you need to have this at closing.

Your Lender Requires It

The first reason why you have to get a homeowner's insurance policy before you close on the house is to meet the requirement your lender has. All mortgage lenders require that homeowners have insurance policies on the homes they have loans on at all times. This means that you will not only need the policy to close on the house, but you must also keep the house insured for as long as you have the loan. This is a requirement all lenders have, and you must follow this requirement. If you do not, your lender will buy a policy to protect their interest in your house.

It Protects Your House

The second reason you need to purchase homeowner's insurance before you take possession of the house is to protect yourself and your investment in the house. When you buy a house, you probably need money for your down payment. After that, you will pay a monthly payment for 15 to 30 years, or maybe even longer.

If you do not have insurance on this house, you will lose your entire investment if anything destroys the house. Your home insurance protects your home and the things you have in it. If a fire destroys your house, your insurance company will pay to rebuild it. If someone breaks in and steals your things, your insurance policy will reimburse you for your loss.

Even if your lender did not require homeowner's insurance, it is something you should always keep on your house. It is the only thing you have to protect your home and all your belongings, and living without insurance is highly risky.

Getting homeowner's insurance is an important step of buying a house, and you will need to have proof that you have insurance on the house you are buying when you get to your closing appointment. If you still need to purchase a policy before you close on your loan, contact a homeowner's insurance company today by visiting websites like http://gateway-insurance.com.