This may sound like a dumb question, but here it goes… When we purchase home insurance prior to closing. Are we paying for the year in advance? If so, then that portion of the morgage will not be included in the first year?
First, the only dumb question is the one you DON’T ask!
You will pay for the first year of insurance prior to closing, but escrow will start collecting funds for next year’s premium. The escrow account may not run a deficit (negative balance), so it will be collecting funds in advance.