Home Insurance

You may have heard about something called home insurance a lot while searching for your dream home and talking with realtors, brokers and lenders. This may have left you wondering to yourself, what exactly is home insurance? Well wonder no longer!
Homeowners insurance is what gives you financial protection in case your home or anything inside is damaged. There are many different types of policies you can choose from to cover your home. So what is or is not covered?
Most homeowners insurance policies will cover damage caused by fire, windstorms, hail, lightning, theft or vandalism. Usually, floods and earthquakes are excluded. Because of this, it is important to talk to an agent to see what your policy may or may not cover.
A standard policy has dwelling coverage. This means it pays to repair or rebuild your home such as electrical wiring, plumbing, heating and air conditioning. Personal property coverage is also included. This means you are reimbursed for personal items in your house that may be damaged or destroyed by a covered cause of loss. This includes things such as furniture, clothes and electronics.
Loss of use is another addition that is usually in a policy. This means that you are paid for additional housing and living expenses if you need to move out of your house temporarily while it is being restored. Liability insurance is another perk that is included. This helps to protect your assets and protect you in case you are in a lawsuit because you or your family members are responsible for causing injuries or damage to other people or their property.
Home insurance is something that is there to protect you and ensure you are always prepared for the worst. It is a great asset to have and can give you peace of mind as you settle into your new, dream home. So there you have it!

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Home Energy Conservation

Imagine, you have just moved into your brand new dream home. Everything is exactly how you imagined, then you get your utilities bill. All of the sudden, you don’t feel quite as happy as you did before. Fear not! There are a few ways to help cut down costs on your energy bill in your house!
In order to help conserve energy, one major thing you can do is to seal any air leaks you may have. You can insulate your doors, windows and attics. This actually can reduce your heating and cooling bill by 20%! Another pretty easy thing to do is simply turn off the lights when leaving a room. You can turn off lights, televisions, fans and any other appliances you may have to help reduce energy usage.
An easy tip you can do, is to turn off your AC when you’re at work. You can actually program your thermostat to your schedule and this way, it can turn off after you leave for work and turn on right before you get home from work. By doing this, you can actually save around 10% on your annual cooling costs! Another important AC tip is to check the age of your AC. If it is older than 10 years, then more than likely it is not as efficient as it could be. By replacing your system, you can reduce your electric bill and you could even qualify for a tax credit for the coming year. One more important tip regarding AC’s is to replace your filters often, or even switch to reusable, cleanable ones. This can reduce energy bills because dirty filters slow down the flow of air and forces your unit to worker harder for the same results.
You can also replace light bulbs around your house to more energy-efficient halogen incandescent ones. This can surprisingly reduce your energy consumption by a third! One more tip for you to use is to wash your clothes in cold water. Using hot water is not actually necessary to clean your clothes. Cold water can do just as good a job as hot water can. By using these tips, you can start to enjoy your new home even more by saving money!

Investment Properties

If investing in a property is something you want to do, then there are things that you need to think about and make sure to do.  This way you are as prepared as you possibly can be.  One good step to start with is to ensure you have a sizable down payment.  Mortgage insurance does not cover investment properties, thus you need at least 20% down in order to secure traditional financing.  Without a down payment, you can try to get a second mortgage on the property, but this is very difficult.

Another good thing to do is to ask for owner financing.  In the past, this used to cause sellers to feel suspicious of potential buyers.  This is because anyone could qualify to get a bank loan, however it’s more acceptable these days because of the tightening of credit.  If you go down this path, you should make sure you have a plan.  Make sure to present your plan for payments to ease the seller’s fears.

Make sure to think smart.  When looking at a property that has a good chance of making a profit, think about getting a down payment or renovation money through home equity lines of credit.  This can be from credit cards or in some cases life insurance policies.  However, always make sure to research this before going through with any plan to ensure you are willing to take the risks that come with it.

Financing for purchase of the property could be possible via private loans from lending companies.  These companies connect investors with individual lenders.  Just keep in mind that if you are new to this, and don’t have much of an investment history yet, you may be met with some doubt.  Your credit may also need to meet a certain standard as well, so just make sure to be as prepared as you can!

Foreclosures

When deciding to buy a foreclosed home, there is a lot to take into consideration, because if not mistakes can be made.  In order to avoid certain mistakes, there are somethings you need to educate yourself on and become knowledgeable on.

When searching for a home, keep in mind that while you can search for foreclosure homes, these are not the only options out there.    It is also very important to remember that these homes come with baggage.  They are not always necessarily move in ready.  Foreclosures come with repairs that need to be made, and it is not always possible to negotiate a lower price to combat these repair costs.

Another important tip to keep in mind is that you should never search for foreclosed properties alone.  Make sure to have an agent with you so that they can guide you.  They will know more about these types of properties than you and give you more guidance.  While this is true, don’t rely on real estate agents to know everything.  They may not know the foreclosure laws since they vary state to state, so it is important to meet with a local real estate attorney as well.

Of course, it is very important for you yourself to be educated and know your budget, the location you want to live and the buying process in general.  You will want to ensure you get pre-approved and know for certain you can afford the property in question.  Make sure you have options, and you know what locations meet your criteria.  Also, educate yourself on the foreclosure process so you know what you are talking about and can allow yourself to have better bargaining power too.

A major thing to take into consideration is the house inspection.  Never skip this.  Go with the inspector while they look at the property and make sure to ask questions and take notes.  This way you can know what exactly you are getting yourself into when you buy a property, or know that this property is not the one for you.  This way you can avoid major problems down the road that you may not be able to get yourself out of.

These are some important things to take into consideration when buying a foreclosure property.  They are challenges, but not impossible challenges if you do your homework and know exactly what you are getting yourself into.

Credit Score

When wanting to buy a house, you will most likely need to meet a few qualifications, one of them being your credit score.  Your mortgage lender will determine your qualification for financing based on this score, but this may depend on who the lender is.  So what is the minimum credit score you need to obtain? In short, it depends.

A lender will determine the loan you can qualify for based on your credit score by taking into consideration several factors such as your payment history, salary history, current wage, available credit and the current economic climate.  Usually, a score of at least 650 will allow you to cross that threshold and receive financing.

Fannie Mae is a government-backed mortgage lending organization.  Many lending companies are influenced by what Fannie Mae does, and will go off of what they do.  Fannie Mae’s minimum credit score for a conventional loan is around 620.  This is something to take into consideration when considering getting a mortgage loan.

A government loan is also another thing to take into consideration.  These companies include the Federal Housing Administration and the Veterans Administrations, and each has a different way of viewing credit scores.  The FHA has changed their minimum credit score to 580.  This means that you would only be required to have a 3.5% down payment.  VA loans on the other hand are 100% financed and set aside for active and retired military.  For these, there is no minimum credit score to qualify, however, the better the score, the better the interest rate.

A credit score is something that will determine your mortgage loan interest rate.  Thus, the better the score, the better the interest rate.  So, if your score happens to be between 620-639, your predicted interest rate would be around 5.7% on a $300,000, 30 year conventional mortgage.  If your score falls between 760-850, then your interest rate would be around 4.1% on the same type of loan.

This is very important to learn about and take into consideration when wanting to buy a home.  If you are afraid your credit score is not very good, and thus will affect you from getting a home loan, there are things you can do to improve it.  You can ensure all your bills are paid on time, pay your credit balances and check your credit report on a regular basis to ensure there are no errors.  Credit scores can play a major role in getting a mortgage loan for your house. It is best to be as knowledgeable as you can be, and learn different ways to improve your score to ensure you get the best loan and interest rate you can.