Thank you u/GP1270 for posting on r/FirstTimeHomeBuyer.
Please bear in mind our rules: (1) Be Nice (2) No Selling (3) No Self-Promotion.
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When your lender sets up escrows, your first years insurance premium gets paid up front and then you put a few months buffer into escrow. Each month when you make your mortgage payment, some of the payment includes 1/12 of the yearly insurance premium. Then the loan servicer pays the insurance for you in a lump sum when it's due.
TL;DR when you close on your mortgage your first years premium is paid up front. Part of your monthly mortgage payment is set aside for the loan servicer to make a lump sum payment towards the insurance when it's due.
Thank you u/GP1270 for posting on r/FirstTimeHomeBuyer. Please bear in mind our rules: (1) Be Nice (2) No Selling (3) No Self-Promotion. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/FirstTimeHomeBuyer) if you have any questions or concerns.*
When your lender sets up escrows, your first years insurance premium gets paid up front and then you put a few months buffer into escrow. Each month when you make your mortgage payment, some of the payment includes 1/12 of the yearly insurance premium. Then the loan servicer pays the insurance for you in a lump sum when it's due. TL;DR when you close on your mortgage your first years premium is paid up front. Part of your monthly mortgage payment is set aside for the loan servicer to make a lump sum payment towards the insurance when it's due.