Every mortgage lender requires homeowners insurance on the home before closing, naming the lender as mortgagee, with dwelling coverage at least sufficient to rebuild the home or cover the loan, depending on the program. In Arizona, shop for coverage as soon as you are under contract. Roof age, claims history and the specific property can change a quote dramatically, and a late surprise moves closing dates.
What the lender requires
- Hazard coverage on the dwelling, generally enough to cover the replacement cost or the loan amount under program rules.
- The lender as mortgagee on the policy, with the loan number.
- A deductible within program limits.
- The first year paid at or before closing, usually through escrow. See Escrow Accounts Explained.
- A declarations page showing all of the above. That is the document underwriting asks for.
Condos and townhomes
If you are buying a condo, the association carries a master policy on the building. You typically need an HO-6 policy for the interior and your personal property, and the lender will review the master policy too. See HOA Document Delays.
What drives the premium in Arizona
- Roof age and type. Older roofs can mean higher premiums, limited coverage on the roof, or a carrier declining to write the policy.
- Claims history on the property. Insurers check a shared claims database. A prior water or roof claim can follow the home.
- Your own claims history and credit-based insurance score, where allowed.
- Location: wildfire exposure in some foothill and rural areas, monsoon wind and hail, distance to a fire station.
- Pools, trampolines and certain dog breeds, which can affect liability coverage.
- Rebuild cost, which tracks construction costs, not your purchase price.
When flood insurance is required
If the home is in a FEMA Special Flood Hazard Area and the loan is federally backed or regulated, which covers most mortgages, flood insurance is required. Your lender orders a flood certification to determine the zone. Parts of the Valley near washes and floodplains are mapped in these zones. Even outside them, flood coverage is worth pricing; monsoon flooding does not check maps.
How to avoid a closing-week scramble
- Get quotes during your inspection period. You learn about roof and claims issues while you can still negotiate or walk away. See Earnest Money in Arizona.
- Ask the seller for the roof age and any recent claims.
- Bind the policy at least a week before closing and send the declarations page to your lender.
- Make sure the coverage amount satisfies the lender. A cheaper policy with too little dwelling coverage will be rejected.
- Bundle with auto if it lowers the total. Many do.
Insurance and qualifying
The premium is part of the payment you qualify on. A quote much higher than the lender's estimate can push your debt-to-income ratio over the limit late in the process. Get a real quote early. See Debt-to-Income Ratio Explained.
Why ask me
- I answer the question before I sell you anything. If renting, waiting or a different program is the better move, I will say so.
- Real numbers, not a calculator guess. I price your actual scenario, side by side, with the fees on the page.
- Every program under one roof. Conventional, FHA, VA, jumbo, and non-QM options like bank statement, DSCR and asset-based loans, so the program fits you instead of the other way around.
- You talk to the principal. Ricky Khamis is President of EPiQ Lending, NMLS #173141, lending in Arizona since 1999 and a 2025 Presidents Club Winner at CMG Home Loans. Direct line: (480) 999-9842.
EPiQ Lending is NMLS #1936984, at 7975 N. Hayden Road, Suite A-101 in Scottsdale. Verify all of it before you trust any of it: Ricky's EPiQ Lending profile, the Scottsdale branch, and the license itself at NMLS Consumer Access. Hold every lender to that standard, including us.
More plain-English answers in the Mortgage Education library.
Equal Housing Opportunity. This is general information, not a commitment to lend or an offer to extend credit. Program guidelines, eligibility requirements and documentation standards vary by investor and change over time. Rates, terms and program guidelines change and depend on credit approval, property appraisal and other qualifying factors. Not all applicants will qualify. This is not legal or tax advice; consult a qualified professional about your own situation.
Find out which program actually costs you less
FHA, conventional and jumbo price the same borrower very differently once the mortgage insurance is compared across the years you will own the home. Tell me the shape of your file and I will run them side by side.
Looking at a specific home? Send me the address and I will run the numbers: rickykhamis.com/analyze
