It’s a big step – and there are probably more pressing things on your mind than your home insurance. That said; it’s really important you contact your home insurance provider once you have a firm closing date, even if you don’t plan on moving for a while, otherwise you might not be properly protected. The three most important tips are:
- A lot of lenders will require a confirmation of insurance or insurance binder prior to the closing date in order to release your mortgage funds. It’s best to give yourself a couple of extra days to make sure all the proper paperwork gets where it needs to go without a rush.
- It’s also a good idea to confirm if there are any specific requirements your lenders have about your insurance. Some will need the policy to insure to Guaranteed Replacement Cost, so you should ask agents when going through the quote process if the policies offer this.
- Finally, it’s important to accurately disclose the home’s occupancy. Insurance policies differ depending on if you are moving into the home right away, or doing some renovations beforehand. Your insurer would also need to know if you have a suite in the home you could rent out, or if it will be vacant for a period of time. If you are planning on doing short-term rentals, like Airbnb, or renting out rooms to a boarder, these are also details that need to be disclosed. You need to find a policy that best suits your specific insurance needs, so don’t be afraid to ask questions.
While the top three tips are listed above, here are some other important pointers:
Download and read our detailed guide for first-time homeowner’s buying home insurance. You’ve just made the biggest purchase of life. We’ll tell you all you need to know about how to protect your investment. No one looks forward to buying insurance, but we’ve made it easy and seamless for you to get exactly what you’re looking for in no time at all.This guide goes through all the potential questions you may be asked purchasing insurance and how and where you would be able to find that information. Review it before you start getting quotes so that you are prepared to answer any questions and able to get the most accurate rates. Often, incomplete information on the home can inflate your rate. For example, if the home you are purchasing is 20 years old, and you don’t know if the roof has been replaced, the insurer may assume it is original and this could cause there to be a surcharge on your premium.
- If you are considering upgrading your home or renovating unfinished square footage after you have taken possession, ask your insurance provider ahead of time how these types of changes can affect your premium so that there are no surprises.
- Take your time choosing a realtor. While you may see a realtor’s name on the back of buses and all the “sold” signs in the neighbourhood you want to live in, take note and call a few. Chances are you’ll get a sense of whether you can work with him or her from a five-minute conversation. Ask friends, colleagues or family members for recommendations. As you’ll have lots of important questions, it’s important to find someone you feel comfortable with and can.
- Make a list of must-haves and stick to it. If you must have a south-facing back yard, don’t let your realtor show you anything else. Try to be flexible on the nice-to-haves and bear in mind that if you can save $20,000 on the purchase price of a not-quite-perfect home, you’ll have money to renovate and make it “your” home in the process.
- Know your budget. With low-interest rates, it’s easy to commit to a higher payment than you can comfortably afford, so try to be realistic. Getting a pre-approved mortgage makes it a lot easier to write an offer on the property you fall in love with. Use a mortgage calculator to determine the payments you can make comfortably on a monthly basis based with your existing budget.
- If the real estate market in your desired location is extremely hot, be patient and don’t be devastated if you don’t get the first home you make an offer on.
- If the real estate market is cold, don’t be afraid to negotiate on price, closing dates, and even some of the furniture if you love the home.
If your realtor is recommending you make an offer without getting a home inspection first, think hard. A qualified inspector can identify things that you won’t see, but need to know about. It’s generally issues behind the walls that can cause the biggest headaches. An inspection can help answer the questions about the home that important when purchasing insurance; details about the type of wiring, plumbing, foundation, and the age and condition of the roof.You may not know these details at first glance and your realtor may not know the specifics, but your insurance provider will need to know these details before issuing a policy. When it’s all said and done remember anything that you’re doing for the first time can feel a bit more stressful. Slow down and enjoy the process. You only purchase your first home once, try to make it as memorable and enjoyable as you can.
For more information on insuring your first home, contact Square One at 1.855.331.6933.