When you buy a home, condo etc. is the home owners insurance automatically included in with the mortgage payment?
Depends on the type of mortgage. Government insured loans like FHA and VA require taxes and insurance to be escrowed along with the loan payment. On privately insured loans (PMI) it’s optional but usually required as they are low equity loans. On private, uninsured mortgages, it’s at the option of the lender. Escrows are usually required on loans with less than 20% equity. With more than 20% equity, the lender figures there’s enough there to get their money back even if the taxes don’t get paid for a while. Insurance is not such a big deal as the lender gets notice from the insurance company if the policy lapses or gets canceled. Common Interest Communities (like Condos) usually have blanket insurance policies that are paid by the Association, so the lender doesn’t escrow the payments. In general, the higher the risk that taxes and insurance won’t get paid, the more likely the lender is to require that they be escrowed. Put down 50% and they don’t care at all.
