Question: On a refinance transaction, regarding the Loan Estimate and Closing Disclosure, does the homeowner’s insurance premium have to be listed as a “pre-paid” item? Is there a difference in disclosing this based on whether it is a refinance of a loan here, or new money to lender?
Answer: The regulation uses the phrase “that the consumer is likely to pay at or before closing”, so if there is an existing policy, probably not. But if the bank knows that the policy is due next month, they will probably insist on the premium being paid, so it should appear – if the bank has the knowledge.
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