You have made the decision to purchase a home! It is a major commitment and quite a financial investment. It is important to protect that investment and homeowner’s insurance will provide coverage for a variety of different situations. In an article published by Yahoo Finance, Jeanie Ahn reviews some basic guidelines for purchasing the correct insurance coverage for your home and belongings.
Obviously, it is important to purchase coverage that provides the funds to repair or rebuild a home that is damaged by disasters such as severe weather and fire. However, depending on the location of your home, you may need to also consider additional coverage such as flood insurance or earthquake insurance. It is vital that homeowners understand what types of situations are and are not covered by their homeowner’s insurance policy and secure the appropriate protection
Not only do you need to protect the structure of your home, you also need to have coverage for your personal belongings inside of the home such as furniture and clothing. According to Ahn, “To estimate how much your policy will cover for your belongings, it’s typically 50-70% of what your home’s structure is insured for.”
Aha goes on to discuss two additional areas of homeowner’s insurance that should considered when purchasing a policy. Liability coverage protects a homeowner in a cases of personal injury that takes place on your property. The last piece of the homeowner’s insurance policy provides financial assistance when homeowners are displaced from their home and is called Additional Living Expenses.
Read the entire article for more details.
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House hunters looking to purchase their first or next home are, undoubtedly, looking for a good deal on the home and a sales transaction void of big surprises or delays. It can be exhausting to get into back and forth negotiations over price. Not to mention potential discoveries in an inspection that need to be agreed upon before the sale moves forward. It can appear, at times, that the home owner is not in any hurry to sell their home and is not willing to budge on their conditions.
In an article by Stephanie Booth, published by realtor.com, she provides seven signs that a homeowner is anxious to sell their home quickly and willing to work out a good deal with a prospective buyer. For example, a home that is listed for sale by an estate might be a sign that the home can be purchased for a bargain price and be a candidate for a quick sale; the people who inherited the home might be out of town residents and/or looking to quickly liquidate the assets of the home.
Similarly, homes that appear to need some minor work such as landscaping and basic maintenance and are overall, just not spruced up to attract buyers, may indicate distress for the homeowner. They may not have the means or resources to make minor repairs or updates to the home and are just looking to move on. A home buyer might find an offer to be quickly accepted and be able to negotiate a quick close with a homeowner motivated to unload the burden of owning a home they can no longer afford to maintain.
Read the entire article for other signs that a home owner is desperate to sell their home.
As the season of spring begins to bloom all around us, so it goes for the spring real estate market. Many homeowners see spring as the perfect time to put their homes up for sale. As prospective home buyers begin their search for their first or next home, they may find that homes aren’t sitting on the market nearly as long as they have been in the past several months.
A recent report provided by a national real estate firm, Redfin, indicates that despite the fact the number of homes for sale has dipped 13 percent from last year at this time, actual home sales has surged 9 percent. Additionally, the number of days until the average home goes under contract has decreased by 11 days since last March, dropping to just 49 days. Lower inventory and fast paced home sales has also driven up the prices of home an average of 7.5 percent.
A CNBC article written by Diana Olick, goes on to detail that not only homeowners are benefiting from a spring jump start. Builders are also tracking a home sales increase of 6.7 percent from last year. However, new home prices have remained virtually unchanged. Olick suggests, this “…may indicate builders are trying to keep prices down in order to get more buyers in the door.”
Home buyers are looking to take advantage of the low mortgage rates and their desire to close the deal has resulted in some very favorable news for those looking to sell their homes.
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The home improvement shows make it look so easy. It appears that as long as you can find an old, run-down house, you can spend a few weeks renovating it and list it for a profit. Many people realize, however, it is usually not that easy. Nevertheless, there is a market for flipping renovated homes and flipping these home can be profitable.
It is important, though, to understand the ins and outs of purchasing an old, dilapidated home and attempting to fix it up for resale. In an article published by Realtor.com, writer Lisa Gordon lists many of common mistakes made by first time home flippers.
For example, it might be tempting to purchase a home “as is” without getting a home inspection since the plan is to fix it up anyway. However, the home inspection will not only help identify major issues that could turn your flip into a money pit; it might also provide some bargaining power on the purchase price.
Gordon goes on to list additional mistakes such as “Overestimating your renovation skills” and “Underestimating total costs”. You may feel it will be easy enough to do all of the work on your own, in order to save money; yet, the article warns, it might be well worth the extra cost to hire professionals for some of the plumbing or carpentry projects.
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Come this July, you may see a boost in your credit score. The three major U.S. personal credit monitoring firms, Experian, TransUnion and Equifax, will be removing some borrowers’ civil judgement and tax lien information from their credit reports.
According to an article published by Fortune.com, written by Kevin Lui, since 2015, these credit reporting firms have been working to correct credit reporting mistakes and removing information unrelated to the borrower’s loan application by omitting information deemed unnecessary to lending. In fact, according the article, “…in 2011 alone, 8 million complaints about wrong information in credit reports were received by the three major credit-reporting firms, according to the CFPB”.
This latest announcement could result in some borrower’s credit scores increasing by up to 20 points. An increase in a credit score can increase the likelihood of securing a loan and is also helpful when applying to rent a home and even can affect future employment opportunities.
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On Wednesday, the Federal Reserve governors decided to increase the interest rate by .25 percent. According to an article written by Amber Tuaufen, published by inman.com, “The Federal Reserve sets the rate for the overnight exchange of money by banks; governors adjust the rate to help curb inflation or stimulate growth, depending on their assessment of what would be best for the economy.”
Despite the fact that this move does not directly affect the mortgage rates, it can have an impact on the rates for mortgages. In fact, an increase in mortgage rates has been anticipated for quite some time now. Many prospective home buyers have been advised that the historically low interest rates were coming to an end; however, rates continued remain low. Many buyers may not have felt pressure to move forward with a home purchase, leading to sluggish sales. It would appear, now, the rates are indeed going to begin to increase.
This potential increase of mortgage rates could have some negative impact on home sales. Yet, some agents feel that the continued affordability of housing coupled with the steady increase of rates could put pressure on prospective home buyers to make a decision and not delay their home purchase any longer.
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When deciding to buy a home or rent a home, the lists of pros and cons for buying or renting can be overwhelming. Depending on the current market conditions, it may seem obvious which choice is more economical. When rates are low and prices are low, buying a home appears to be the best choice. However, as mortgage rates and housing prices begin to increase, renting a home is an option that might seem more economical.
However, an important factor should be considered before deciding to rent instead of buy, even as mortgage rates increase and home values begin to rise. According to an article published by Realtor.com, The Misleading Math Behind the Rent vs. Buy Calculation, “…homeownership is a critical building block of household wealth. Owning a home is a key reason why the median net worth of a homeowner is almost $200,000 while the median net worth of a renting household is just over $5,000.”
A closer look at the comparisons between the cost of buying versus renting reveal some long term advantages to owning a home and uncover some details worth considering. It is common knowledge that part of each monthly payment go toward the equity a homeowner has in their property with a fixed 30 year mortgage. Additonally, as the home owner gets further into the lifetime of the mortgage, the amount they are paying into their own equity begins to increase. An important detail to note, which may not be a common consideration, is that the payment amounts are actually “frozen” for the lifetime of the mortgage. It is unlikely that a renter could expect such a guarantee.
Homeowners know what their housing payment will be for the next 360 months, not many landlords are willing to lock their monthly rental rate beyond a year or two. Further, homeowners are, in essence, locked into a “forced savings plan” where they pay some percentage to their own equity each month. This reason, alone, is the primary factor which makes it more feasible for homeowners to accumulate wealth.
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Since 1981, single women have lead single men in the category of home ownership. Over the past few years, the gap has grown even larger. According to a data released by the National Association or Realtors, in 2016, single women accounted for 17 percent of the US. homeowners. Single men lagged behind, making up only 7 percent of all American homeowners.
According to an article published by Bloomberg.com, “Women earn less than their male counterparts, pay harsher workplace penalties for pursuing parenthood, struggle more with debt, and save less for retirement.” Nevertheless, the rate at which women purchase homes outpaces single men. This begs, the question, why?
The most prominent reason, Mary Pilon points out in her article, “Why Single Women Are Buying Homes at Twice the Rate of Single Men”, is that a woman, as a single mother, places significant value in providing a stable home for her child. Since women are three times more likely, than a man, to be the single parent, the number of homes purchased by a single parent will most likely be a single mother.
Additionally, there are more and more unmarried Americans 25 years old or older; in fact about 20 percent of Americans over the age of 25 are single. According to Bella DePaulo, a professor at the University of California at Santa Barbara, women seem to embrace their single lifestyles more readily than single men. Owning their own home is a way many single women choose to enjoy their years as single professionals; they truly revel in the independence and empowerment home ownership represents.
Read the entire article.
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Most homeowners are aware, or at least should be aware, of tax breaks available to them via various homeowner tax laws. The homeowner tax breaks are designed to make owning a home more appealing and, in many cases, more affordable to the home owner.
In the article 2017 Mortgage Deduction: What Every Taxpayer Should Know published by FoxBusiness.com, the journalist details the types of tax breaks homeowners can take advantage of when filing their taxes each spring. The most common, the mortgage interest deduction, journalist Dan Capinger describes by writing, “Homeowners can typically take the mortgage interest they pay for loans on their home and include it in their itemized deductions.” This can apply to the cost of buying or building your home; even major home improvements can qualify. The current restriction is that the principal balance falls below $1 million for tax payers that file jointly.
However, as the United States prepares to inaugurate president-elect Trump, changes to the mortgage interest deductions are anticipated. During the 2016 presidential campaign, Trump expressed interest in limiting itemized deductions to $200,000 for joint filer; subsequently resulting in a lower cap on mortgage interest deductions.
The potential changes aren’t expected to make any significant impact to most homeowners. Therefore, homeowners should still look for many of these tax benefits to continue to be available, providing access to helpful tax cuts.
Read the entire article for additional details on tax laws available to homeowners.
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A recent ruling by the California Supreme Court might affect some real estate agents and their customers. Specifically addressed in this court case are “dual agents” and the agent’s responsibility to serve the seller as well as the home buyer equally and ethically.
In the case brought to the courts, a home buyer in California purchased a home in 2007. The buyer’s real estate agent worked for the same real estate firm as the seller’s agent. Therefore, the real estate broker was, in fact, a dual agent in the real estate transaction. It later came to light that the home’s square footage was actually significantly less than what was quoted on the flyer provided by the seller’s agent. Based on evidence presented, the justices determined that the buyer’s agent “…breached his fiduciary duty by failing to communicate all of the material information he knew about the square footage.”
In an article published in OCRegister.com, the journalist, Marilyn Kalfus, describes how this ruling could affect both agents and consumers. Specifically, some view this ruling a win for home buyers. In essence, it will ensure home owners are provided thorough and detailed information about the home they plan on purchasing. It doesn’t seem as though the ruling will end dual agent transactions, but it will require brokers to balance the communication they are providing to home buyers while protecting private information that may have been provided by the seller.
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