You can be fully approved for your mortgage on Monday and lose the house on Tuesday. The thing that kills the deal often isn't your credit score or your income. It's your homeowners insurance, the one line item nobody used to worry much about until the end of the transaction.
That has changed. If you're planning a home purchase, treat insurance as a qualification problem, not just a cost problem, and get your quote early enough that you still have options if you don't like the answer.
Insurance is part of your mortgage qualification. If the real premium comes in $1,600 a year higher than the lender estimated, that's another $133 a month in your payment and your debt-to-income ratio.
Lender insurance estimates are far less reliable than they used to be in many markets. Get a real quote as soon as you're under contract, while your contingencies still protect you.
The property itself matters. Roof age and condition, construction type, prior insurance claims, and exposure to fire, flood, wind or hail can dramatically change the premium and the number of carriers willing to insure the home.
Insurers can use the property's prior claims history when underwriting your policy, even when those claims happened before you owned it and the damage was properly repaired.
California's standard purchase contract now includes a specific insurance contingency, and Colorado's contract includes a Property Insurance Termination Deadline. Elsewhere, talk to your agent or attorney about how insurance is addressed in your offer.
You have some control over the cost through your deductible, credit-based insurance score where permitted, safety upgrades and carrier selection, but the biggest lever is simple: shop early.
Here's the reframe Josh pushes with every borrower. Insurance headlines have buyers asking, "Can I get coverage, and what will it cost?" Those are fair questions, but in Josh's experience, the bigger problem usually isn't that absolutely no insurance solution exists. Even on some strange and difficult properties, he's been able to find coverage.
The real problem is often what that coverage costs and what the added premium does to your payment and qualification.
Your mortgage payment is PITI: principal, interest, taxes and insurance. That second I is the one that can create problems because the lender has to estimate it before you've identified the final home and obtained a real policy quote.
Suppose the loan officer who pre-approved you used $75 a month, or $900 a year, for homeowners insurance. Then you get under contract and the real premium comes back at $2,500 a year.
That's another $1,600 annually, or about $133 a month, added to the payment used to calculate your debt-to-income ratio. If you were already qualifying near your limit, that can be enough to knock you out of the loan. Even if you still qualify, you may look at the new payment and decide you don't want it.
Two homes at the same price, in the same general market, can produce very different insurance premiums. That's why the insurance number belongs in the affordability conversation, not in a checklist somebody remembers three days before closing.
Insurance is also an easy number for a salesperson chasing the lowest possible payment to underestimate. If the real premium eventually comes in much higher, they can say they don't control the insurance company, which is technically true. The better approach is to explain that the initial number is an estimate, show you how it affects the payment, and replace it with a real quote as soon as you identify the property.
Josh has closed more than 1,300 loans. The process used to be much easier because insurance estimates were more predictable. In many parts of the country, especially markets dealing with wildfire, wind, hail and other concentrated risks, that's no longer the case.
Lenders have to estimate homeowners insurance during pre-approval because you don't have a specific property or insurance quote yet. Years ago, a simple purchase-price estimate would often get reasonably close.
That's far less reliable today.
Major catastrophe losses, higher rebuilding costs, changing weather risk, carrier pullbacks and changes in insurance markets have made premiums much more property-specific. California is an obvious example, where wildfire exposure, rebuilding costs and insurers reducing or restricting new business have dramatically changed the market.
That means the solution isn't finding a better magic formula for estimating insurance.
It's replacing the estimate with a real quote earlier.
A listener who recently closed in rural Colorado shows why that matters. Their home sat far enough from fire protection that the insurance company viewed the response risk differently. There wasn't the same nearby fire infrastructure or water pressure you'd expect in a more developed area, and the home's construction created more risk than a standard stick-built tract home with stucco and an asphalt roof.
It wasn't a bad house. They loved it.
When Josh originally ran the mortgage numbers, he used roughly $175 to $200 per month for insurance. The real number came back closer to $350.
On a $300,000 home, that's a meaningful difference. Fortunately, they had chosen to buy comfortably below their maximum qualification, so the conversation became, "Are you okay with this payment?" instead of, "You don't qualify anymore."
That's exactly where you want to be.
This is the most obvious mortgage problem.
When the insurance premium comes in higher than expected, your PITI goes up. That pushes your debt-to-income ratio higher, and a borrower who was already near the maximum can fall out of qualification entirely.
Even if it doesn't kill the approval, the higher payment may kill the deal for you because the home no longer fits the budget you originally agreed was comfortable.
The fix is to front-load the insurance quote. If there's a surprise, you want to discover it while your contract contingencies are still active and there may still be time to adjust the loan, renegotiate where appropriate, choose another insurance option or decide the house no longer makes sense.
This is also why we don't like maxing out someone's qualification on day one. A little room in the budget gives you the ability to absorb the things nobody can perfectly predict before you've found the house.
If you want the mortgage side of that calculation, our breakdown of debt-to-income ratios explains how the payment ultimately affects your approval.
You can have an 800 credit score, excellent income and a perfect financial history, and the property can still create the problem.
The roof is one of the first things insurers may care about. A newer roof generally creates fewer underwriting problems, while an older roof can lead to inspections, reduced roof coverage, repair or replacement requirements, or fewer carriers willing to write the policy.
Carrier requirements vary by state, roof material, condition and individual company. There isn't one magic age where every roof suddenly becomes unacceptable.
Josh has seen insurers ask for the appraisal because it includes information about the roof. One listener's carrier went even further and required documentation showing when the roof had been permitted and replaced.
That's information you want early.
Jeb's warning from the real estate side is important too. If an older roof is still functional, don't automatically assume the seller is going to buy you a brand-new one because an insurance carrier doesn't love its age.
You can ask. You can negotiate. But the seller may say no.
Construction and location matter as well.
Josh's loan partner Jed owns a property in a Florida storm-risk area with an older roof. At one point he was paying roughly $12,000 per year through a high-risk carrier. After replacing the roof, he was able to shop a much larger group of insurers and brought the premium down to roughly $5,100.
The value of the new roof wasn't just that the shingles were newer. It changed the insurance market available to him.
This one surprises buyers because it has nothing to do with their own insurance history.
Insurers can access the property's previous claims through the C.L.U.E. report, the Comprehensive Loss Underwriting Exchange maintained by LexisNexis. Property reports can contain claims information going back several years and may be used when insurers evaluate a new policy.
Jeb recently worked with clients buying in Mission Viejo whose insurance quote came in roughly $150 a month higher than Josh's estimate. When they dug into it, the property had two prior water-damage claims.
The prior owner hadn't ignored the problem. A bathroom leak had caused water damage and some mold, and the repairs and remediation had been handled properly through the owner's insurer and licensed professionals.
The claim still existed in the property's history.
That's the important lesson. The repair can be complete and the claim can still affect how another carrier views the property.
Some carriers may still insure the home but impose conditions. Josh has recently seen companies require buyers to install water-leak detection systems after closing as part of maintaining coverage.
Again, this doesn't automatically make the home bad.
It makes the insurance quote something you want before you're emotionally and financially trapped in the transaction.
Location has always mattered in real estate. Now it can matter almost as much to the insurance company.
In California, wildfire exposure is the obvious example. In Florida and other coastal markets, wind and hurricane risk dominate the conversation. Across parts of Texas and the Midwest, wind and hail can be major rating factors. Flood insurance may be another separate expense depending on the property's flood-zone designation and the loan.
None of those automatically make a home a bad purchase.
You may love a hillside property surrounded by open space. You may want to live near the ocean. Those locations have value precisely because people want to be there.
But there may be an insurance premium attached to that choice, and you need to know what it is before you commit.
The rural Colorado borrowers are another good example. They wanted the space and location that came with being farther out. The insurance market simply placed a higher price on the same characteristics they liked about the property.
That's okay if you know the number and consciously accept it.
It's a problem when you find out at the end.
Twenty years ago, buyers could often call their auto insurer a few days before closing, ask for a homeowners policy, and get a reasonably priced quote with very little drama.
That is a terrible process today in many markets.
The lender ultimately needs acceptable homeowners coverage in place before the loan can close, and the insurance premium also affects the payment and final closing figures. Waiting until the last few days leaves very little room to solve a property question, shop another carrier or deal with a premium that's dramatically higher than expected.
Jeb and Josh recently had a client still working through insurance on the final day of the transaction. The property wasn't impossible to insure. The borrower was shopping for a better option after the carriers started asking questions about the home.
They got it done, but it easily could have delayed closing.
That's unnecessary stress created almost entirely by timing.
California responded to the changing insurance market by adding a specific insurance contingency to its standard Residential Purchase Agreement in 2024. It gives buyers a defined opportunity to investigate whether acceptable property insurance is available and evaluate the terms and cost before that contingency is removed.
Colorado's standard contract approaches the same problem through a Property Insurance Termination Deadline, which allows the buyer to evaluate the availability, terms, conditions and premium for property insurance.
The exact contract language differs by state, so don't assume your offer automatically gives you the same protection. If insurance availability or cost could materially affect your decision, ask your real estate agent or attorney how the issue is addressed in your state's contract and in your specific offer.
Whatever the contract says, the practical responsibility is still yours.
Get the quote while the protection still matters.
Finding out your insurance premium is unacceptable the day after you've released the relevant contingency is very different from finding it out the day after your offer gets accepted.
California creates another useful example because difficult-to-insure properties aren't necessarily completely uninsurable.
The California FAIR Plan can provide last-resort basic property coverage for eligible properties when traditional insurance isn't reasonably available. But it isn't the same package you'd normally receive from a standard homeowners policy.
Buyers may also need supplemental coverage, often called a Difference in Conditions policy, to add protections such as liability, theft and other perils that aren't covered by the basic FAIR Plan policy.
That means the relevant question isn't simply:
"Can I get insurance?"
It may be:
"What combination of policies do I need, and what will the total cost be?"
That final number can materially change the mortgage payment and your decision to buy.
This is an area where Jeb's experience from more than 20 years representing buyers is useful.
Don't automatically send an insurance company your entire home inspection report just because you have it.
A full inspection report can contain dozens of observations covering everything from major systems to minor deferred maintenance. An insurance underwriter may interpret those items differently than a home inspector or buyer would, and you can create a pile of additional underwriting questions that have nothing to do with what the carrier originally needed.
Instead, ask the insurance company exactly what information it needs. Then talk with your agent and inspector about the appropriate documentation to answer those questions.
Sometimes the carrier may need information about the roof, electrical system, plumbing, water heater or other property characteristics. Your inspector may be able to provide a summary or specific documentation addressing those items without volunteering hundreds of unrelated observations.
That doesn't mean withholding information the carrier requires.
If the insurer specifically requests the full inspection report or asks a material underwriting question, answer honestly and provide the documentation required.
The goal isn't to hide anything.
It's to answer the question being asked instead of handing an insurance underwriter a 70-page report they never requested.
You don't control where the house sits, its prior claims history or the insurance market in your state. But if multiple carriers are willing to insure the property, there are still some things you can control.
One of the most direct levers is the deductible.
Josh carries a $10,000 deductible on his own home because he doesn't intend to file an insurance claim over smaller repairs. He's using insurance primarily for major losses.
Your number may be completely different.
A higher deductible generally means you're accepting more of the initial risk yourself, which can lower the premium. The deductible still has to fit your finances and any insurer or lender requirements, so don't raise it to a number you couldn't comfortably pay after a loss.
You're trying to insure against financial disaster, not create a new one.
In many states, insurers are allowed to use a credit-based insurance score as one factor in underwriting or pricing.
That's related to your credit history, but it isn't the same thing as your mortgage FICO score.
Other states restrict or prohibit its use, and the rules differ depending on where you live. So we don't think a national list of states is particularly useful here.
The practical takeaway is simpler: good credit can help you in more places than the mortgage application.
Some insurers offer discounts for qualifying protective devices and safety improvements. Depending on the carrier, those may include monitored alarm systems, water-leak detection, sprinkler systems or other approved upgrades.
The specific device and discount vary by insurer, so ask when you're getting the quote rather than assuming something like a video doorbell automatically saves you money.
This also circles back to the property itself.
A newer roof or updated electrical and plumbing may give you access to carriers that wouldn't otherwise write the home. Sometimes the biggest insurance savings doesn't come from a 5% discount.
It comes from moving out of the expensive carrier pool entirely.
This is still the biggest lever you have.
As soon as you're under contract, start the insurance conversation. Don't wait until every other part of the loan is finished.
Many buyers naturally start with the company that insures their cars because bundling can create a discount and it's an easy first call. That's perfectly reasonable.
But treat it as the first quote, not necessarily the final answer.
If the premium comes back substantially higher than expected, shop. If the carrier doesn't like the roof, find out whether that's one company's rule or a broader problem. If prior claims are affecting the quote, understand why.
You want time to solve the problem.
Jeb's advice from the buyer side hasn't changed because of insurance.
Location comes first. Then pay close attention to the expensive systems you're inheriting.
Cosmetics can usually wait.
You can replace flooring later. You can paint the kitchen. You can change countertops when the budget allows.
A roof, major electrical work, plumbing replacement or other big-ticket system is different.
When two homes otherwise work equally well, a newer roof, updated plumbing and electrical, and fewer known property risks can make one home easier to insure while also reducing the chance that your first years of ownership are dominated by major repairs.
That doesn't automatically make the cheaper-to-insure house the better house.
It means insurance has become one more piece of the total cost of owning the property, right alongside maintenance, taxes, HOA dues and the mortgage.
That's the calculation an educated buyer should be making.
If you want a real estate agent who approaches the property that way, we can connect you with someone from Jeb's vetted network. And building a realistic insurance and property-tax number into the mortgage payment is exactly the kind of thing Josh and his team work through on a Roadmap call.
That's really the entire message.
Homeowners insurance used to be one of the boring things you cleaned up near the end of the transaction.
Not anymore.
The premium can change your qualification. The property can limit your carrier choices. A prior owner's claim can affect your quote. The roof can create a problem. The location can push you into a different insurance market entirely.
None of that means you should be afraid to buy.
It means insurance now belongs near the front of your due diligence, not two days before closing.
Get the quote early. Understand what is being covered. Know your deductible. Make sure the full payment still works.
Then make the decision with the actual numbers instead of an estimate.
Stop guessing what you can really afford
It starts with a Discovery Call, a straight conversation about your real numbers. Josh and his team show you the price range and loan options that fit, and map out every step to closing. They handle your loan directly, never a referral, so you tour with confidence and write offers sellers take seriously.
Yes. Homeowners insurance is part of the housing payment used to calculate your debt-to-income ratio.
If the actual premium comes in substantially higher than the lender estimated, the resulting payment can push a borrower who was already near the qualification limit beyond what the loan program allows. Even when the borrower still qualifies, the higher payment may make the purchase less comfortable than expected.
That's why the insurance quote should be obtained early instead of relying on the lender's initial placeholder.
Start shopping as soon as you're under contract.
Your inspection may provide information the carrier needs about the roof and other major systems, but don't wait until the end of the contingency period to start calling insurers. The goal is to identify any major premium or coverage problem while you still have time to evaluate the property and your options.
Waiting until the final days before closing dramatically reduces your ability to solve a problem.
The seller's premium isn't necessarily your premium.
Insurance pricing can change over time, and carriers may evaluate roof age, construction, location, current rebuilding costs and the property's prior claims when quoting a new buyer. Your own characteristics may also affect pricing depending on your state and insurer.
A seller who has owned the property for years may therefore have a very different premium from the quote available to you today.
C.L.U.E. stands for Comprehensive Loss Underwriting Exchange.
It's a LexisNexis database containing insurance-claims information that carriers may use in underwriting. A property's prior claims can therefore affect the insurance options or premium available to a new buyer even though those claims occurred before the buyer owned the home.
That's one reason a fully repaired water loss can still show up in the insurance conversation years later.
Don't automatically send the entire report unless the carrier requests it.
Ask what information the insurer actually needs, then work with your agent and inspector to provide appropriate documentation. A full inspection report may contain many unrelated observations that create additional underwriting questions without helping answer the carrier's original concern.
If the insurer specifically requires the report or asks about a material condition, provide the requested information accurately.
For an eligible property, the California FAIR Plan may provide basic last-resort property coverage when traditional insurance isn't reasonably available.
It is not identical to a standard comprehensive homeowners policy. Buyers may also need supplemental coverage to protect against risks such as liability, theft and other perils.
The important number is therefore the total cost of the insurance package you actually need, not simply whether a FAIR Plan policy exists.
Often, yes.
A higher deductible means you're agreeing to pay more of a covered loss before the insurance company pays, which can reduce the premium. But the deductible still needs to be an amount you could comfortably pay after a loss and must comply with any applicable insurer or lender requirements.
The cheapest premium isn't helpful if the deductible makes the policy unusable when you actually need it.