Why am I paying for insurance twice on the closing statement?
When you purchase a house, lenders will require the house to be insured. Even if a buyer pays cash, it is a good idea to have insurance on the house. The first year insurance premium is usually paid at closing. Lenders will often require borrowers to establish an escrow account to pay future tax and insurance bills.
On the closing statement, the full annual premium will be collected. In addition to the annual premium, two or three months of insurance will also be collected to fund the escrow account. Borrowers pay into the escrow account each month to make sure there is enough to pay the next insurance premium when it comes due the next year. Even though it looks like the insurance is being paid twice on the closing statement, it is not.
John C. Bennett is a real estate closing attorney and owner of Origin Title and Escrow, Inc.. Since 2003, Origin Title has handled real estate transactions – purchases, refinances, reverse mortgages – quickly and professionally. There will be no surprises, nothing misunderstood. Title searches are thorough and well-reasoned, to avoid unpleasant surprises later down the road. Calculate your closing costs in Georgia or Florida using our calculator or contact Origin Title using this form.