What is included in the closing expenses for a Member?

The inclusion of HOI (Homeowner's Insurance) escrow for three months in closing expenses is correct because, during the closing process, lenders typically require that a portion of the homeowner's insurance premium be collected in advance. This funds the escrow account used to pay for the homeowner's insurance when it comes due. Including three months of HOI in the closing costs ensures that the insurance coverage is maintained without interruption and protects the lender’s investment.

This is a common practice, as it helps both the lender and the borrower manage the payment of insurance premiums. It also aligns with the understanding that a borrower is expected to demonstrate responsible financial management by ensuring that they have insurance coverage upon closing.

In contrast, while homeowner's insurance for the first month, PMI (Private Mortgage Insurance) only, and all taxes and insurance for the first year could be relevant to different aspects of financing a home, they do not reflect the typical items that are categorized as closing expenses in the context of initial escrow requirements. Each of these options may cover important aspects of homeownership, but the escrow for three months of HOI is specifically associated with closing expenses aimed at maintaining immediate coverage.