Can you prepay homeowners insurance???

[buyhouse36]

In the area where we live, taxes and homeowners ins are under $1000 each per year. We were considering pre-paying our homeowners insurance because of the discount. If you do this, will it be included in the approval process???  Must UW calculate PITI or can they use PIT for approval???

[hawkeye33]

Regardless of whether you prepay or not, it is still an ongoing expense that must be paid for, so yes, when looking at your DTI ratios and such, they will need to include an estimate of the insurance costs. Once approved, if you want to prepay your insurance (or if you want flexibility on insurance payment terms), just don't elect to pay insurance via escrow and instead make your insurance payments directly to the insurance agency.

[Anonymous]

Yes, you can in fact before I closed underwriting/mortgage broker insisted on it, so I pre-paid it and they sent my "binder" to the mortgage company and it was all set when I closed. It's actually cheaper way too, I am saving on my mortgage each month by pre-paying, and I pre-paid for the year, and they gave me a good deal to pre-pay my auto insurance witht he same company

Hope that helps good luck.

[cdtotten]

I believe he is asking if you can prepay to remove it from DTI calculations... and the answer to that is almost always no. You can't prepay the insurance for the full 30 years, so it is something that has to be factored in. Just because you can afford to pay it right now for a year, doesnt mean you can in the future, so it must be part of the DTI calc.