How does first-year home insurance escrow work if I pay in full upfront?

I've been approved for a FHA loan. The agent says I need to pay for the home insurance a year in advance. So does this mean I don't need to pay into escrow for home insurance in the first year?

Answer
Congratulations on getting approved for your loan! Your first year of home insurance will be paid upfront on or near your closing date for the purchase. This payment is part of your first-year escrow.
From this point, your lender will estimate what your escrow should be every year in order to make sure your mortgage, taxes, and home insurance are paid in full and on time. Sometimes there are overages or shortfalls in an escrow account. Your lender would reach out to you if either of these circumstances occurs. Enjoy your new home!
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Jackie Whalen
Answered on Mar 18, 2021
Jackie Whalen has been in the insurance industry for over 7 years, working in sales, service and claims. She has won numerous awards as a top salesperson and customer service agent. She currently lives in New York with her husband. Her 24 year old son recently moved out on his own which has given her more time to travel, write and train her dog Maisy not to chase her cat, Whiskey.
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