How Much Can You Expect to Pay for Homeowner’s Insurance?
You're either interested in purchasing or you're a first-time homebuyer. One pressing question you will certainly have is regarding how much you will be paying for homeowner's insurance. Here's a rough estimate.
Annual Insurance Costs
Although this estimate may be a little high (better safe than sorry), take a look at the value of your home and figure that you will be spending about 5% of that annually on insurance costs. Divide the number by 12 to get an idea of what you might be paying monthly to account for it.
State By State
Depending on which state you live in and what type of coverage you would like, this number will definitely vary. When making the final consideration, contact a local
real estate agent to find out what your actual projected costs are.
Home Repair
If you are planning on dabbling in home repair that involves reconstruction, you may want to ask your real estate agent or insurance broker if the cost will change during that time, likewise if your policy can be reduced after the remodel is complete. Insurance can sometimes be adjusted for a variety of reasons and it is always important to ask what types of situations might allow for a lowered rate.
Conclusion
If you are thinking about buying a home it is important to estimate the cost, both annually and monthly for your homeowner’s insurance. As with any large purchase or investment mandatory costs such as homeowner's insurance and property tax should always be calculated in with your monthly mortgage costs. You may have the option of paying the insurance monthly, on an automatic payment plan, or annually. Most insurance companies accept both, it's really up to the individual to determine which method will best fit their needs.
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