What is hazard insurance?

Hazard Insurance is also know as homeowners insurance. Yes it is required. It is used when your home is damaged or destroyed by fire, hurricanes, wind, etc. Insurance is paid in advance, so 1st year is paid by closing and monthly payments toward next year's renewal are added in your housing payment. You are able to shop around for the best coverage/price.

As mentioned hazard insurance is "homeowners insurance" to cover repairs in the event of a loss...this protects the lender as well as yourself. All loans over 80% loan to value will require you to pay impounds with your mortgage payment to cover insurance premiums as well as your taxes. It is done as part of the loan process as well as monthly with your mortgage. The only time you MAY not be required to have hazard insurance would be with a condo purchase.

Also known as homeowners insurance it insures the replacement cost of the home in case of damage.It is needed when you obtain a mortgage for protection of the asset the loan is secured by. It may or may not be included in your mortgage as an "impound" and this depends on your scenario. Although most mortgages require it as an impound, in some instances of high down payment, it may be removed with or without penalty to the interest rate.