Homebuyer guide
What your mortgage company actually requires.
Lenders have a short checklist. Meeting it is necessary but not sufficient — here's the full list, plus the gaps that get past closing and bite later.
The lender's checklist
- Dwelling coverage — usually the greater of (a) the loan amount or (b) 100% of replacement cost.
- Mortgagee clause — your lender named on the dec page as first mortgagee with their loan number.
- Deductible cap — typically no higher than 1% of dwelling or $5k–$10k.
- Effective date — coverage starts on or before closing.
- Paid-in-full first year — most lenders require the first year prepaid at closing.
- Flood insurance — only if home is in a FEMA SFHA.
Meeting the minimum isn't the same as being covered
Your lender doesn't check: roof endorsement (RCV vs ACV), wind/hail deductible structure, water backup, ordinance & law, personal property sub-limits, or liability above $100k. Every one of those can be missing on a policy that closed without issue.
Closing soon?
Upload your dec page and we'll confirm you meet the lender requirements AND show you the gaps the lender didn't check — in 60 seconds.
Review my dec pageFrequently asked
How much homeowners insurance do I need for a mortgage?
Most lenders require dwelling coverage equal to either the loan amount OR 100% of the home's replacement cost — whichever is greater. They don't care about market value. They also require the mortgagee clause naming the lender as 'first mortgagee' on the policy.
What's a mortgagee clause?
A short paragraph on your declarations page that names your lender as a payee on any claim check above a certain amount (typically $5,000–$10,000). It also notifies the lender if your policy lapses. Without it, your lender won't accept the policy at closing.
Can the bank choose my homeowners insurance?
No. You pick the carrier. But if you let coverage lapse, the lender can 'force-place' insurance — typically 2–3x the price of a normal policy, and it only covers the lender's interest, not your contents or liability. Avoid this at all costs.
Do I need flood insurance with my mortgage?
Only if your home is in a FEMA Special Flood Hazard Area (SFHA). The lender pulls a flood determination at underwriting. If the home is in an SFHA, federal law requires flood insurance for the loan term. Outside SFHA, it's optional but often a good idea.
What deductible does my mortgage company allow?
Most lenders cap the deductible at the lesser of 1% of dwelling coverage or $5,000–$10,000. A few permit higher. Check before you raise your deductible to lower premiums — you might breach your loan covenant.
Does the mortgage company review my full policy?
They check the dec page and the mortgagee clause. They don't audit your endorsements, sub-limits, or wind/hail deductible structure. Meeting the lender's minimum is not the same as being properly covered — that's where most homeowners get caught.