If you are planning to purchase a home, it is important to have an idea of the full monthly amount that you can afford to pay for a mortgage. However, it is also important to estimate the cost of other essential expenses, such as homeowners' insurance. There are multiple factors that will affect the cost of your home insurance. Here are a few of them:
The Cost of the Home
Like the cost of an automobile, the worth of your home will affect the amount that you will spend for insurance. If your home is destroyed during a house fire or other disastrous event, the cost of replacing your home will be dependent on its original value. Thus, the monetary risk for the insurance company is greater if your home is more expensive.
You have probably tried to ensure that your credit rating remains high, especially as you are looking for a new home to purchase. However, your credit also affects the cost of your homeowners' insurance. People with a low credit score or poor credit history are viewed as more of a risk. As a result, homeowners' insurance for people with poor credit may be a bit pricier.
Still, there are things you can do to improve your score. If you still have several months before the purchase of your home, be sure to obtain a credit report and review your credit score. If you notice any errors on your credit report, it is best to dispute them with the reporting agency as soon as possible. The credit reporting agency will often contact the lender, and if the lender does not respond, the judgment will be in your favor. Also, if there are outstanding balances that are delinquent, it is best to pay those in full as soon as possible. Any past-due amounts can continue to lower your overall credit rating. Additionally, try not to pursue any additional credit that will cause a lender to check your credit history. If you initiate the pursuit of more credit and your credit history is checked, it will temporarily lower your credit rating.
For the lowest price on home insurance, during your housing search, look for homes that have safe systems in place, such as a security system, a fire alarm system and sprinklers. Additionally, try to avoid features that may be viewed as unsafe, such as a large in-ground swimming pool. If you do opt for a pool, be sure that it is properly fenced and protected from unauthorized entry.
To learn more ways to lower the cost of your homeowners' insurance, schedule an appointment with an insurance professional in your area, like one from United Insurance Agency Inc.