5 Things to Know About Homeowner’s Insurance


1. Know about exclusions to coverage. For example, most insurance policies do not cover flood or earthquake damage as a standard item. These types of coverage must be bought separately. 

2. Know about dollar limitations on claims. Even if you are covered for a risk, there may be a limit on how much the insurer will pay. For example, many policies limit the amount paid for stolen jewelry unless items are insured separately. 

3. Know the replacement cost. If your home is destroyed you’ll receive money to replace it only to the maximum of your coverage, so be sure your insurance is sufficient. This means that if your home is insured for $150,000 and it costs $180,000 to replace it, you’ll only receive $150,000. 

4. Know the actual cash value. If you chose not to replace your home when it’s destroyed, you’ll receive replacement cost, less depreciation. This is called actual cash value. 

5. Know the liability. Generally your homeowner’s insurance covers you for accidents that happen to other people on your property, including medical care, court costs, and awards by the court. However, there is usually an upper limit to the amount of coverage provided. Be sure that it’s sufficient if you have significant assets.

Should I buy or Rent?


A big question that may cross a person in his lifetime is whether to continue renting or finally settle down and buy a home. While owning a home is considered as a good idea, there are also advantages of renting a home. Additionally, there are disadvantages of both the above mentioned propositions. Given below are the pros and cons of renting as well as buying a house. Weigh the benefits and drawbacks of both and take a decision that best fits in your situation.

Buying a House
The following are the merits and demerits of Buying a house.

Pros
There are many factors that make buying a home a good move.
 ■The foremost benefit of buying a house is that it is a valuable investment. Although, down payment of money can be burdensome at times, it is still worthwhile as it increases your asset. And, if the economic scenario is good, your property value shall appreciate over a period of time.
 ■Buying a house provides a sense of stability and security.
 ■You can’t ignore the bliss of the freedom to design and renovate that you can enjoy as an owner of the house. You can live the way you like without having to bother about the visits of landlord.
 ■You can enjoy tax benefits as real estate tax and mortgage interest can be a tax deduction.

Cons
In spite of aforementioned privileges, being an owner of a house has its own demerits as well.
 ■Maintenance is the major issue as the upkeep of your house including the yard is your sole responsibility. In addition to physical efforts, you need to allocate funds for your house’s maintenance too.
 ■Cost involved in buying a home is another main problem. If you are looking for a mortgage, you should need good credit, down payments, stable income and employment. Besides, long term mortgage could lock you into one investment for more than 30 years.
 ■Relocating to another place is not easy as you find yourself rooted because of being a property owner.

Renting a House
The following are the merits and demerits of renting a house.

Pros
 ■The best part of renting a house is that you don’t have to bother about the cost and effort of property maintenance. This is one of the popular reasons why people prefer renting a house rather than buying. You need not worry about any issues as long as you pay your rent promptly.
 ■There is less pressure on your budget. Owning a house involves more than just the cost of the house. It includes taxes, expenses involved in upkeep of the house, etc. Therefore, renting a house is more practical as it requires small investment.
 ■Relocation is easier for those living in a rented accommodation. If you don’t like a locality, or want to move to another city you can change your house whenever you like.

Cons

Renting a house also has some disadvantages.
 ■There is little stability as any time the owner of your property can increase the rent or even send you a notice to vacate the house.
 ■You can’t restructure your house as per your wish. Even if you are allowed to make improvements to your home like landscaping, it will improve the value of the home and will benefit the house owner or just passed on to the next renter.
 ■The big disadvantage of renting a house is loss of value. Every month you pay rent but don’t get any asset out of it however, when you pay mortgage payment, you get to own a house after a few years.

Conclusion: Buying or renting a house depends upon a personal outlook and the financial status of every individual. If you are a person who is having the lifestyle that requires constant relocation, or want to have uncommitted lifestyle, renting a house might be the best option for you whereas buying a house is a smarter choice if you plan to stay in that house more than 10 years and have a cash to invest.

8 Tips to Guide for Your Home Search

1. Research before you look. Decide what features you most want to have in a home, what neighborhoods you prefer, and how much you’d be willing to spend each month for housing.

2. Be realistic. It’s OK to be picky, but don’t be unrealistic with your expectations. There’s no such thing as a perfect home. Use your list of priorities as a guide to evaluate each property.

3. Get your finances in order. Review your credit report and be sure you have enough money to cover your down payment and closing costs. Then, talk to a lender and get prequalified for a mortgage. This will save you the heartache later of falling in love with a house you can’t afford.

4. Don’t ask too many people for opinions. It will drive you crazy. Select one or two people to turn to if you feel you need a second opinion, but be ready to make the final decision on your own.

5. Decide your moving timeline. When is your lease up? Are you allowed to sublet? How tight is the rental market in your area? All of these factors will help you determine when you should move.

6. Think long term. Are you looking for a starter house with plans to move up in a few years, or do you hope to stay in this home for a longer period? This decision may dictate what type of home you’ll buy as well as the type of mortgage terms that will best suit you.

7. Insist on a home inspection. If possible, get a warranty from the seller to cover defects for one year.

8. Get help from me.  Hire me  a real estate professional who specializes in buyer representation. Unlike a listing agent, whose first duty is to the seller, a buyer’s representative is working only for you. Buyer’s reps are usually paid out of the seller’s commission payment.

Reason to Own Your Home


1. Tax breaks. The U.S. Tax Code lets you deduct the interest you pay on your mortgage, your property taxes, as well as some of the costs involved in buying your home.

2. Appreciation. Real estate has long-term, stable growth in value. While year-to-year fluctuations are normal, median existing-home sale prices have increased on average 6.5 percent each year from 1972 through 2005, and increased 88.5 percent over the last 10 years, according to the NATIONAL ASSOCIATION OF REALTORS®. In addition, the number of U.S. households is expected to rise 15 percent over the next decade, creating continued high demand for housing.

3. Equity. Money paid for rent is money that you’ll never see again, but mortgage payments let you build equity ownership interest in your home.

4. Savings. Building equity in your home is a ready-made savings plan. And when you sell, you can generally take up to $250,000 ($500,000 for a married couple) as gain without owing any federal income tax.

5. Predictability. Unlike rent, your fixed-mortgage payments don’t rise over the years so your housing costs may actually decline as you own the home longer. However, keep in mind that property taxes and insurance costs will increase.

6. Freedom. The home is yours. You can decorate any way you want and benefit from your investment for as long as you own the home.

7. Stability. Remaining in one neighborhood for several years gives you a chance to participate in community activities, lets you and your family establish lasting friendships, and offers your children the benefit of educational continuity.

Online resources: To calculate whether buying is the best financial option for you, use the “Buy vs. Rent” calculator at www.GinnieMae.gov.

Tips for buying in a tight market


Increase your chances of getting your dream house in a competitive housing market, and lower your chances of losing out to another buyer.


1. Get Pre qualified for a mortgage. You’ll be able to make a firm commitment to buy and your offer will be more desirable to the seller.

2. Stay in close contact with your real estate agent to find out about the newest listings. Be ready to see a house as soon as it goes on the market — if it’s a great home, it will go fast.

3. Scout out new listings yourself. Look at Web sites such as REALTOR.com, browse your local newspaper’s real estate section, and drive through the neighborhood to spot For Sale signs. If you see a home you like, write down the address and the name of the listing agent. Your real estate agent will schedule a showing.

4. Be ready to make a decision. Spend a lot of time in advance deciding what you must have in a home so you won’t be unsure when you have the chance to make an offer.

5. Bid competitively. You may not want to start out offering the absolute highest price you can afford, but don’t go too low to get a deal. In a tight market, you’ll lose out.

6. Keep contingencies to a minimum. Restrictions such as needing to sell your home before you move or wanting to delay the closing until a certain date can make your offer unappealing. In a tight market, you’ll probably be able to sell your house rapidly. Or talk to your lender about getting a bridge loan to cover both mortgages for a short period. 

7. Don’t get caught in a buying frenzy. Just because there’s competition doesn’t mean you should just buy it. And even though

What a Home Inspection Should Cover

Home inspections will vary depending on the type of property you are purchasing. A large historic home, for example, will require a more specialized inspection than a small condominium. However, the following are the basic elements that a home inspector will check. You can also use this list to help you evaluate properties you might purchase.

For more information, try the virtual home inspection at www.ASHI.org, the Web site of the American Society of Home Inspectors.

Structure: A home’s skeleton impacts how the property stands up to weather, gravity, and the earth. Structural components, including the foundation and the framing, should be inspected.

Exterior: The inspector should look at sidewalks, driveways, steps, windows, and doors. A home’s siding, trim, and surface drainage also are part of an exterior inspection.

·  Doors and windows
·  Siding (brick, stone, stucco, vinyl, wood, etc.)
·  Driveways/sidewalks
·  Attached porches, decks, and balconies

Roofing: A well-maintained roof protects you from rain, snow, and other forces of nature. Take note of the roof’s age, conditions of flashing, roof draining systems (pooling water), buckled shingles, loose gutters and downspouts, skylight, and chimneys.

Plumbing: Thoroughly examine the water supply and drainage systems, water heating equipment, and fuel storage systems. Drainage pumps and sump pumps also fall under this category. Poor water pressure, banging pipes, rust spots, or corrosion can indicate problems.

Electrical: Safe electrical wiring is essential. Look for the condition of service entrance wires, service panels, breakers and fuses, and disconnects. Also take note of the number of outlets in each room.

Heating: The home’s heating system, vent system, flues, and chimneys should be inspected. Look for age of water heater, whether the size is adequate for the house, speed of recovery, and energy rating.

Air Conditioning: Your inspector should describe your home cooling system, its energy source, and inspect the central and through-wall cooling equipment. Consider the age and energy rating of the system.

Interiors: An inspection of the inside of the home can reveal plumbing leaks, insect damage, rot, construction defects, and other issues. An inspector should take a close look at:
·  Walls, ceilings and floors
·  Steps, stairways, and railings
·  Counter tops and cabinets
·  Garage doors and garage door systems

Ventilation/insulation: To prevent energy loss, check for adequate insulation and ventilation in the attic and in unfinished areas such as crawlspaces. Also look for proper, secured insulation in walls. Insulation should be appropriate for the climate. Excess moisture in the home can lead to mold and water damage.

10 Questions to Ask Your Lender


1. What are the most popular mortgages you offer? Why are they so popular?

2. Which type of mortgage plan do you think would be best for me? Why?

3. Are your rates, terms, fees, and closing costs negotiable?

4. Will I have to buy private mortgage insurance? If so, how much will it cost, and how long will it be required? (NOTE: Private mortgage insurance is usually required if your down payment is less than 20 percent. However, most lenders will let you discontinue PMI when you’ve acquired a certain amount of equity by paying down the loan.)

5. Who will service the loan — your bank or another company?

6. What escrow requirements do you have?

7. How long will this loan be in a lock-in period (in other words, the time that the quoted interest rate will be honored)? Will I be able to obtain a lower rate if it drops during this period?

8. How long will the loan approval process take?

9. How long will it take to close the loan?

10. Are there any charges or penalties for prepaying the loan?

8 Tips to Guide for Your Home Search

1. Research before you look. Decide what features you most want to have in a home, what neighborhoods you prefer, and how much you’d be willing to spend each month for housing.

2. Be realistic. It’s OK to be picky, but don’t be unrealistic with your expectations. There’s no such thing as a perfect home. Use your list of priorities as a guide to evaluate each property.

3. Get your finances in order. Review your credit report and be sure you have enough money to cover your down payment and closing costs. Then, talk to a lender and get prequalified for a mortgage. This will save you the heartache later of falling in love with a house you can’t afford.

4. Don’t ask too many people for opinions. It will drive you crazy. Select one or two people to turn to if you feel you need a second opinion, but be ready to make the final decision on your own.

5. Decide your moving timeline. When is your lease up? Are you allowed to sublet? How tight is the rental market in your area? All of these factors will help you determine when you should move.

6. Think long term. Are you looking for a starter house with plans to move up in a few years, or do you hope to stay in this home for a longer period? This decision may dictate what type of home you’ll buy as well as the type of mortgage terms that will best suit you.

7. Insist on a home inspection. If possible, get a warranty from the seller to cover defects for one year.

8. Get help from me.  Hire me  a real estate professional who specializes in buyer representation. Unlike a listing agent, whose first duty is to the seller, a buyer’s representative is working only for you. Buyer’s reps are usually paid out of the seller’s commission payment.

Home ownership Vs. Rental cost

To a family that is renting, it comes as no surprise to hear that rental rates are going up. With these rates continuing to rise, buying a home looks better and more practical than ever.
Not only does purchasing a home provide a more secure future for you, but the advantages of home ownership are numerous: build-up of equity; a tax shelter; remodel and redecorate as you see fit. But most important of all, it provides you with a buffer against inflation and rising rental rates.
Every situation is unique. It would be my pleasure to provide you with a personalized analysis of home ownership costs vs. your present rental costs. This analysis is provided free of charge with no further obligation required on your part.