Get a homeowners insurance quote before you offer — or risk your mortgage approval falling apart

Along with the loan payment itself, a new mortgage payment also includes homeowners insurance premiums.

So when a quote for insurance comes in higher than expected, the entire house payment can grow, sometimes by a hundred dollars or more. This can push the payment out of the buyer's budget.

But buyers can remove this potential for surprise costs by getting insurance quotes before making the loan application.

...in as little as 3 minutes — no credit impact

Why insurance is derailing more deals than it used to

Homeowners insurance premiums have risen for five consecutive years, driven by more frequent severe weather, higher rebuilding and materials costs, and insurers pulling back or raising rates in higher-risk regions.

Nationally, insurance now makes up about 9% of a typical monthly mortgage payment. In coastal, wildfire-prone, or storm-prone states, that share climbs to 15% or 20%.

A few years ago, insurance was a relatively small, predictable line item in a buyer's monthly payment. A loan officer could enter an estimate that was pretty reliable.

Today, homeowners insurance premiums can be expensive enough, and volatile enough, to change whether a specific purchase still works on paper, especially for buyers whose debt-to-income ratio doesn't have much room to spare.

How a high premium can sink a deal you thought was done

Mortgage payments include more than principal and interest. If your loan has an escrow account, as most do, your homeowners insurance premium and property taxes get folded into your total monthly payment. That total payment, not just principal and interest, is what your lender uses to calculate your debt-to-income ratio.

Here's where it goes wrong: many buyers estimate their insurance cost using a generic online calculator or a rough number from their agent, submit an offer based on that estimate, and get a real, address-specific quote once they're already under contract.

If the real quote comes back significantly higher, the total monthly payment goes up, and so does your DTI. Every loan program has a maximum DTI it will allow. If a higher-than-expected premium pushes you past that ceiling, your loan can require a suspension for restructuring, or in some cases, denial, even though nothing about your income or credit changed.

...in as little as 3 minutes — no credit impact

How to get a real quote before you offer

A few steps before you submit an offer can prevent this from happening:

• Get an address-specific quote, not a generic estimate. Ask an insurance agent or carrier for an actual quote on the property you're considering, not a rough calculator estimate based on home value and location type. Real quotes factor in the roof's age and material, the home's distance to a fire station or hydrant, and its specific flood or wildfire risk designation, all of which can move the number substantially.

• Ask about the property's claims history. A home with prior water damage, roof claims, or a history in a high-risk zone can carry a higher premium or, in some cases, be harder to insure at all. Your listing agent should be able to help you ask the seller for this information before you submit an offer.

• Check the specific flood zone and wildfire risk designation. These vary block by block in some areas, and a home just outside a mapped flood zone can carry a very different premium than one just inside it.

What to do if the quote comes back high

If your quote comes back higher than you expected, you still have options before you're financially locked in.

First, shop multiple carriers. Premiums for the same property can vary meaningfully between insurers, so getting more than one quote is worth the extra time. Consider a higher deductible in exchange for a lower monthly premium if you have the savings to cover it in a claim.

Then, if the number changes your math significantly, factor it into your offer, whether that means offering less than you originally planned or asking the seller for concessions toward closing costs to offset the difference.

It's also worth revisiting your debt-to-income ratio with the real premium included before you move forward. If you're close to your program's limit, even a few hundred dollars a month in unexpected insurance costs can matter.

...in as little as 3 minutes — no credit impact

Where monitoring insurance costs closely matters most

This isn't an equal risk everywhere. Buyers in coastal states, wildfire-prone regions, and areas with a recent history of major storms are the most likely to see a big gap between a rough estimate and a real quote. If you're shopping in one of these areas, treat the insurance quote as seriously as the home inspection. That is, complete this step _before_ you're emotionally and financially committed, not after.

If you're buying in a lower-risk area with a stable insurance market, the gap between an estimate and a real quote is usually smaller, though it's still worth confirming before you offer rather than assuming.

Frequently asked questions

I'm about to make an offer on a house in Florida. Should I get an insurance quote first, or wait until after it's accepted?

Get the quote first. Florida is one of the states where the gap between a rough estimate and a real, address-specific quote tends to be largest, so it's worth knowing your real number before you're under contract.

Can a high homeowners insurance quote actually cause my mortgage to get denied after I'm already under contract?

Yes, although indirectly. If a higher-than-expected premium pushes your total monthly payment high enough to exceed your loan program's debt-to-income limit, your loan can require restructuring or, in some cases, be denied, even though your income and credit haven't changed.

What's the difference between an online insurance estimate and a real quote for a specific house?

A generic online estimate is based on broad factors like home value and general location. A real quote is tied to the specific address and factors in details like the roof's age and material, flood and wildfire risk designations, and the home's claims history, any of which can move the number significantly.

If my insurance quote comes back way higher than expected, can I renegotiate my offer or back out?

That depends on your specific contract and whether you already have contingencies in place. It's generally easier to adjust your offer or negotiate before you're under contract than after, which is part of why getting the quote early matters.

Why have home insurance premiums gone up so much in the last few years?

More frequent and severe weather events, higher costs to rebuild and repair homes, and insurers adjusting or pulling back coverage in higher-risk regions have all contributed to five consecutive years of rising premiums nationally.

Does raising my deductible actually make a meaningful difference in my monthly insurance cost?

It can, though the size of the difference varies by carrier and property. It's worth asking for a comparison at a couple of deductible levels when you get your quote, so you can weigh the monthly savings against what you'd need to cover out of pocket in a claim.

Bottom line

Insurance costs have always been connected to mortgage approval. What's new in the past five years is the higher cost of insurance.

Getting a real, address-specific quote before you submit an offer, rather than after, is a simple step that can remove the mystery before underwriting begins.

To get a fuller sense of your mortgage costs, get a free pre-approval.

...in as little as 3 minutes — no credit impact