Your home–one of your biggest lifetime investments–must be protected from the dangers of nature and the world.
What if a volcano erupts, a satellite drops, the wind blows, lightning strikes, or fire burns? For those threats, you need insurance, and you need the right amount.
The biggest catastrophe would be not having enough coverage.
Consider these three types of coverage:
- Standard dwelling coverage.
This is based on the cost to rebuild your house, based on construction and material costs in your area. Your homeowner’s insurance company can give you an estimate and might even update your coverage for you to reflect changing costs of labor and materials. Note that standard coverage does not cover everything. It almost certainly does not cover floods or earthquakes. Or nuclear war.
- Extended replacement cost.
Not offered by every company, extended coverage can absorb price increases. If a tornado tears through your town, labor and materials could be scarce and costs could rise. With standard dwelling coverage, you are insured to the limits of your policy but no more. With extended coverage, even if costs rise, your investment will be protected.
- Guaranteed replacement cost.
This is the best coverage because it pays to rebuild your house no matter how much costs have gone up. You might need this in a high-value, historical home, for example. You might need it if your home has special features that would be difficult and expensive to replace.
At this time of year, everyone else is going over the river and through the woods to grandma’s house, but a brave few are headed into the real estate market. Is that a smart move?
Depends on how you look at it. There is no doubt that the real estate market slows down at the end of October. According to the National Association of Realtors, sales of existing homes drop about 30 percent between December and January. Home sales traditionally do not pick up until the end of January.
For sellers, the holidays still can be profitable. Holiday home buyers are usually serious about buying quickly. The buyers are hitting open houses while the browsers are off at the mall. Plus, for sellers, there is no better time to show a house than the holidays, when a tasteful Christmas tree, wreath and sparkling lights can make a house feel like your future home.
For buyers, it’s a great time too, because with less competition from others, buyers have a good negotiating position with sellers who want to move quickly. If a buyer finds a house during the holidays, it is possible that he or she will be able to come to an agreement with the seller to accommodate holiday plans.
If you are selling your home during the holidays, take this advice from home staging experts:
- Stick with simplicity. Take down your personal pictures and collections. Put up simple Christmas decorations, including a tree, wreath and a few strands of lights outside. Put a few nicely wrapped presents under your tree.
- Build a fire in the fireplace. Play holiday music softly. Put potted evergreens in place of potted flowers.
The millennial generation has grown up and they want to buy homes.
Every year for the next 10 years, millions of millennials will hit home buying age. The average age of a millennial is 32. The average age for home buying is 31, according to ETF Trends.
No wonder there is a record boom in buyers and potential buyers.
Available housing down
While there are lots of buyers, there are fewer homes for sale. That adds up to a supply and demand formula that puts sellers comfortably seated in the parlor, taking offers.
Half of the buyers who purchased a home in the last three months were forced into a bidding war, according to internet real estate company Redfin, as the average home sale price spiked 6 percent. That equals 100 straight months of price gains, according to the National Association of Realtors.
It isn’t just millennials who are buying these days, either. A new wave of city dwellers from cities like New York are looking to the suburbs to escape violence and lockdowns. In July, there was a 44 percent increase in suburban home sales and in some cases, homes sold for prices that were as much as 21 percent over list, according to The New York Times.
With this reality in mind, homebuilders are busy. New home starts jumped to their highest level since 2006. Housing starts increased 17 percent in June. Nearly six in 10 homebuilders have raised their prices, according to CNBC.
More houses built
Privately-owned housing starts in July zoomed up 22.6 percent above estimates and 9.4 percent above July 2019, according to the Census Bureau.
The number of completed homes was up 3.6 percent above estimates in July. That was 1.7 percent higher than the June 2019 rate.
COVID-19 lockdowns impacted housing starts in March, which were at their highest level since 2006. But starts have rebounded.
For home investors, the robust nature of the housing market should offer some safety for the next few years, according to Stephen McBride of ETF Trends.
Life comes at you fast. In your youth at the peak of your health, in middle age, at the height of responsibility, what if an accident or illness took you off the family map? We all know it can happen and few think it will.
As a matter of fact, about 40 percent of people have no life insurance at all. Of the people with life insurance, about half are underinsured.
But the cold fact remains: What happens to your family if you die? Will they be able to afford the house? How will their lifestyle change? Who will support the family? How will they support the family?
Life insurance answers many of those questions — and it answers them affordably.
The least expensive form of life insurance — term insurance — is very inexpensive. A healthy 30-year-old can get $250,000 of insurance for about $15 per month. The earlier you buy term insurance, the less expensive it is and many policies don’t even require a health check.
Many people have life coverage at work, but this should be reviewed because it may not be enough. Primary breadwinners should have coverage equal to six to 10 times their annual incomes. Term policies usually cover only your working life.
Whole life is another kind of life insurance. Unlike term policies, it covers you for life, as long as you make payments. It also has the benefit of building cash value. Although most experts say it shouldn’t be considered an investment, if you get a big policy at a young enough age, and keep it until retirement, you could have a nice nest egg to tap into at retirement. Whole life policies can also be cashed in by your Power of Attorney for some part of the face value if you enter a nursing home, for example. It could be considered a small inheritance. Whole life policies usually require a medical exam and are unlikely to cover smokers.
Many websites compare costs of life insurance options.
Lending standards have tightened and some types of loans may be difficult to get.
It is true that credit availability dramatically tightened since the coronavirus crisis hit hard in February 2020. Credit supply was down 30 percent. With millions out of work, some could no longer afford to pay their mortgages. That meant lenders had less money to lend at a time when they were also not receiving payments on existing loans.
Since February, the situation has somewhat improved. While credit supply for conventional loans dropped 6.9 percent in May, it rebounded in June to just a one percent drop.
With renewed talk of coronavirus increases, lenders of all types have tightened limits and availability in anticipation of possible job losses.
One good sign of an improving economy is that mortgage applications rose 2.2 percent for the week ending July 3 over the previous week. Forbearance rates (the number of mortgage holders who can’t pay and have to make an arrangement with the lender) dropped 8 basis points to 8.39 percent in the first week of July. That means more mortgage holders were able to make their payments.
The news for buyers with cash for down payments and high credit scores, is the incredible 3.26 percent mortgage interest rate on a 30-year fixed rate loan.
People with a credit score of at least 700, with a 20 percent down payment, should be able to get financing. Lenders have cut back on jumbo loans, which are generally loans of more than $510,400.
You have probably heard the ads, and they may seem bizarre. People steal a deed to a house and suddenly the owner is not the owner.
House stealing is actually a thing and has been since at least 2008, according to the FBI. It tends to pop up in major cities and targets properties that are empty or used infrequently, like vacation homes.
Here is how it works:
Bad guys pick out a house — usually a rental, vacation home, or vacant home — then they research the owner. After obtaining fake IDs and forged signatures, they file a transfer of ownership with the county’s registrar of deeds. They quickly sell the home, or borrow against it, taking out all the equity. Then, poof. They are gone.
Many counties these days are offering free community notifications. When you register, you will receive an email or text when a document is recorded for your property.
You can also sign up for a title lock service that will monitor your home’s deed to prevent fraud. The cost is usually minimal, about $150 per year.
Anyone that lives in the Cypress, TX area should consider purchasing their own home. When you are a property owner in this area, you can benefit a range of different ways. While there are a lot of advantages that come with buying a home, you need to understand your insurance requirements. There are several situations when you will need coverage.
When Taking out a Mortgage
One situation when you will need to get home insurance is when you pledge your loan as collateral to another party. If you take out a mortgage, a home equity line of credit, or another type of loan, the lender will want to make sure that their collateral is secure. The best way that they can do this is by ensuring you have home insurance at all times. It is important to work with your lender to fully understand their home insurance requirements.
When Moving into an Association
Another situation when you will be required to take get a home insurance policy is when you are going to move into an area that has a home association. If you move into an area with an association, the local document and regulations will require that you carry insurance at all times. This will provide assurances to the association that you can handle any liability claims and repair your home when necessary.
Ultimately, picking a new home insurance policy is always going to be a big decision. For those that are in the Cypress, TX area, and are looking for insurance, InsureUS is a great company to contact. The team at InsureUS excels at helping property owners understand all of their needs and options. This will help ensure you have a guide that can allow you to pick a policy that provides you with the right coverage.
Millennials are buying homes, and it’s probably fair to say, they would like that deal delivered.
Those people born between 1980 and 1999, made up the largest share of home buyers last year (37 percent), according to data from the National Association of Realtors. Of those, 86 percent of younger millennials and 52 percent of older millennials were first-time homebuyers.
Millennials want different things from previous generations. While previous generations might have wanted to get away from the city, millennials are just as likely to want to be in it. So, if the city has spread out toward your once-suburban home, don’t be afraid to emphasize the location. Millennials want short commutes. They don’t like lines. They want everything delivered and that includes all the services of the city from groceries to fine dining or even fast food. They want lots of choices in restaurants and bars, and nearby entertainment.
According to the National Retail Federation, millennials are in a hurry. Millennial buyers don’t house shop casually. They are internet savvy and accustomed to doing research online. More than 80 percent of millennials look for a home on a mobile device.
Millennials are less likely to care about square footage than other generations. They prefer home features: Garages that double as recreation rooms, designer laundry rooms, and walk-in pantries that hold food, wine, and appliances.
No, for the buyer, the same rules that apply to any mortgage apply to a condo buyer. Keep in mind that in calculating your debt-to-income ratio for the loan, lenders will count your condominium fees as part of your total monthly expenses.
A condo mortgage is different because the building itself has to qualify for the loan.
Generally, lenders won’t make a loan on a condominium that is in poor financial shape or poorly maintained. It has to be a properly run residential building.
The lender looks at the condo association records to make sure it is sufficiently insured, isn’t being sued, and residents are paying their dues (no more than a 15% delinquency).
Lenders also want to make sure the building is residential, with at least 50% owner-occupancy. They don’t want to see stores or hotel rooms. They don’t want to see condo units sold as time shares.
Finally, at least 90% of the units have to be occupied.
If the condominium project is established and known to meet guidelines, and you are a credit worthy borrower, you will probably have little difficulty getting a conventional loan.
You might want to do a little extra research, however. Remember that when you buy a condo, you are buying into the Homeowners Association and you are sacrificing some privacy for convenience. It’s a good idea to take a look at the minutes from the HOA meetings to see the sorts of issues being discussed.
When the building qualifies and you find the property suitable, financing a condo should be much the same as a conventional home.
A lease-to-own, also commonly referred to as a rent-to-own or a lease option, is an arrangement between a buyer and a seller in which the seller leases a property for a set period of time, at which point the buyer typically has the option to purchase the property outright (sometimes a contract legally obligates the buyer to purchase).
Nearly everything in this type of contract is negotiable. Often, the seller agrees to set aside a portion of the monthly payments toward a down payment or equity in the home.
It’s also important to note that this is commonly used as a short-term agreement — a few months to a few years — and that, at the end of the lease period, the buyer needs to obtain a traditional loan.
So why would either side consider a rent-to-own scenario?
A buyer may need time to put away money for a down payment and/or to build up their credit. Perhaps they’re self-employed, for example, and need a few years’ worth of tax returns to demonstrate income stability to a traditional bank. Or they have less than stellar credit and simply need time to repair it.
A seller might like the idea of locking in a purchase price and collecting monthly payments along the way. Say the two sides agree to a three-year term with a purchase price of $170,000. If the buyer pays $1,000 a month, the seller collects $36,000 and still sells for $170,000 at the end — which, even after expenses, can net the seller a nice profit.
A lawyer who’s well-versed in real estate law is usually the best person to review, if not draw up, the contract. And buyers should keep an eye on building their reserves and credit so they can qualify for a mortgage that will allow them to take ownership at the end of the term.