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Step by Step Closing for Buyers and Sellers
When you have found the home of your dreams, or sold your home, you as the buyer or seller will have to appear at a meeting in which all of the final legal details will be handled, this is known as the closing.
Others in attendance are the real estate agent(s), lender and a closing agent. The meeting usually occurs either at an agent’s office, escrow agent’s office, attorney’s office, or at a lending institution such as a bank or mortgage company.
The main emphasis is to review all of the paper work, and to sign the different forms for financing, and to transfer title to the new owner. For the buyer and seller, knowing what to expect can ease concerns on the process of closing.
Typically the buyer will have more of a role to play in the process of closing on a house. However, the seller will have an important role as well. Usually a review of the settlement statement is presented first for both to agree upon and sign. You will need to be sure about the terms and agreements before you sign.
Next the buyer will be required to show proofs of required mortgage related or homeowner insurance, and that all necessary inspections have been completed according to the guidelines of the contract. All parties must be in complete agreement over terms and sign the documents.
Once this phase is completed both parties will present a certified check for the entire amount of the closing costs. The lender will present the funds paid to the closing or escrow agent, also if there are any funds due they will be submitted at that time to the lending agent.
Depending on the requirements you agreed to as a buyer, your bank or mortgage company may have stipulated that you will need to set up an escrow account to pay your property taxes, or may be your designated home insurance provider out of this account, this will be handled at the closing for your new home.
Other issues such as the recording of the deed will be discussed. Don’t be surprised if you are informed that you don’t have legal claim to the property until it is officially recorded at your local courthouse. It is to be understood that you may not move in until you have legal ownership of a clear title, and this process can take from a few days to over a week. This is why disbursement of funds to anyone involved in the transaction will not be paid until the deed recording is completed.
If you’re the buyer you will need to know what forms you will be required to sign. Take a few moments and write down a check list, and bring along copies of any paper work you have been required to sign or review. An important document known as the Truth in Lending statement will contain vast amounts of financial information for the buyer. This statement will contain information such as your interest rate for the mortgage, amount of cash financed, and your monthly payment schedules along with the total amount paid based on the length of your loan.
Detailed information will be found in other paper work for the buyer too. The mortgage note and other assigned specifications will spell out in specifics terms such as how and where the note is to be paid, and the institutions right to reclaim their rights to the property. This legal documentation will also explain that you’re to meet other specific requirements, such as paying any necessary insurances and taxes yearly, that is of course if you are allowed to pay this independently, and is not part of an escrow account.
The value and importance of a good real estate agent or broker is quickly appreciated at the closing. Many of the processes involved are explained by a caring and competent professional before the closing ever takes place. Make sure though that you do your part by taking the time to ask any questions you have with your real estate broker, and studying, if necessary, your part of the process, whether you’re the buyer or seller.
Home buying and selling can be a pleasant experience for all involved without a lot of hassle and grief. Just make sure you approach it with the right attitude and guidance.
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Time For a Year-End Tax Review
Many of us experience events throughout the year that might require us to go back and review our current financial plans. Life changing events such as marriage, divorce, new additions to the family, job loss, retirement and death are all perfect examples of situations that will likely require revision, or even radical revamping, of your current plan. When it comes to financial, insurance, estate and tax issues, many of us are procrastinators. However, if you make it a goal to complete a simple year-end checklist now, you could save yourself money and time, and gain the piece of mind that comes from knowing your family is well taken care of.
If you’ve just been tossing your receipts into a shoe box all year long, now would be a good time to sort through them and organize them according to categories such as job-related expenses, education or job-hunting expenses and charitable contributions, just to name a few. If you’re self-employed or own a small business, now might be the time to invest more money into your work by purchasing a new computer system, office furniture or a work vehicle. All of these items can be granted quite an attractive deduction come tax time.
If you’re one of the lucky ones and the stock market was good to you this year and you have some capital gains from your investments that are going to be exposed to taxes, a prudent year-end plan should include taking the time to sort through your accounts, and using a strategy known as tax-loss harvesting. This technique involves selling the losers in your portfolio to offset any realized gains. If you wait 30 days and obey the requirements of the wash-sale rule, you can then buy back the securities, if you wish.
Don’t be afraid to generate large capital losses, because there is no limit to the amount that can be offset against capital gains. You can claim an additional $3,000 loss on your federal taxes, and then carry forward the remaining loss into future tax years.
Giving to Others
If you have children or grandchildren, you may (depending on the state in which you live) also receive a state tax deduction for your contributions to a 529 college savings plan. And, let’s not forget that your charitable contributions are usually, partially, tax deductible. When you give to a charity, make sure you get a receipt you can use come tax time.
If you’re computer savvy, consider buying a tax software program such as TurboTax or TaxCut to play around with just so you can see the various deductions allowed and the potential savings available.
Getting Your Estate In Order
A key part of estate planning that many of us overlook is the matter of beneficiary designations. From time to time it is a good idea to verify that these designations are still as you would like them to be. At a minimum, your estate-planning checklist should include reviewing the beneficiary designations for your IRA accounts and life insurance policies and checking the validity of your will.
You may also want to look into adding a “transfer-on-death” (TOD) feature to taxable accounts in order to have them avoid probate in the event of your death. While you have these documents out it would be a good idea to check that your current life insurance coverage is adequate for your present circumstances. Are you underinsured? Are you over-insured? If you are attempting to reduce the value of your estate for estate-tax planning purposes, consider using your annual $13,000 tax-free gift per person in 2011.
Other Overlooked Areas
As the year goes by it’s not uncommon to forget to make your retirement plan contributions, or fail to set aside enough money to maximize the contribution. Since the maximum contribution limits have changed over the past couple of years, and will continue to change in the upcoming years, you’ll want to check with your financial planner to make sure you are contributing the correct amounts. If you recently turned 50, you should be eligible for a larger contribution amount, known as a “catch-up” contribution. Also, if you are age 70.5 or older, you need to make sure you’ve taken your required minimum distributions (RMD) from your tax-deferred retirement plans, such as IRAs and 401(k)s.
Finally, depending on your credit history, you might want to check your credit rating and credit report by going to a reputable online site such as myFICO, which offers you your FICO score plus credit reports from all three credit bureaus for a fee.
In Summary
Along with making a year-end financial ‘to-do list,’ to help you stay on top of the matters we’ve covered here, you should also take some time to prepare your new household budget for the year ahead. Once you have a system in place, the process will become easier every year. You may find it hard to get motivated to tackle some of these tasks, especially during the holiday season, but the potential tax savings and other benefits covered here could be history once December 31st has come and gone. So roll up your sleeves and get to work – you’ll be glad you did come April next year.
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Don’t Wait For Interest Rates to Bottom Out
Whether you’re considering buying your first home, or thinking about refinancing a home you already own, the only pressure you should find yourself under now is to find the right interest rate and to close on that rate as soon as you possibly can to take advantage of the record low rates we are seeing right now.
If you’re thinking of refinancing, with rates as they are now, you might be able to lower your interest rate by one full percentage point or more. If that’s the case, and the costs to refinance are low, you can immediately take advantage of that lower rate. Then, if rates go down further, you can always consider refinancing again.
If you’re shopping for a home and will need a new mortgage, there has never been a better time to buy than now. Inventory is plentiful, and mortgage rates have never been so low. As a general rule, you should never try to time the market — that’s how you miss getting a great rate.
To find a great mortgage, you should talk to at least one national mortgage lender, one local lender, a credit union and a mortgage broker. Ask your friends which bankers and brokers they have used; if they had a good experience with that person or company, give them a call as well.
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Underwater Mortgage Relief (HARP)
More homeowners who are underwater on their mortgage should be eligible now to refinance through the government’s Home Affordable Refinance Program (HARP) as a result of changes to the program announced last week.
Started in 2009, it lets homeowners refinance their mortgages at lower rates. Borrowers can bypass the usual requirement of having at least 20 percent equity in their home. But few people have signed up. Many “underwater” borrowers — those who owe more than their homes are worth — couldn’t qualify under the program. Roughly 22.5 percent of U.S. homeowners, about 11 million, are underwater, according to CoreLogic, a real estate data firm. As of Aug. 31, fewer than 900,000 homeowners, and just 72,000 underwater homeowners, have refinanced through the Obama administration’s program. The administration had estimated that the program would help 4 to 5 million homeowners.
That didn’t happen, however, mainly because those who’d lost the most in their homes weren’t eligible. Participation was limited to those whose home values were no more than 25 percent below what they owed their lender. That excluded roughly 10 percent of borrowers.
So What’s Changing?
Homeowners’ eligibility won’t be affected by how far their home’s value has fallen. And some fees for closing, title insurance and lien processing will be eliminated. So refinancing will be cheaper. The number of homeowners who need an appraisal will be reduced, saving more money. Some fees for those who refinance into a shorter-term mortgage will also be waived. Banks won’t have to buy back the mortgages from Fannie or Freddie, as they previously had to when dealing with some risky loans. That change will free many lenders to offer refinance loans. The program will also be extended 18 months, through 2013.
How many homeowners will be eligible or will choose to participate is not entirely clear. The government estimates that up to 1 million more people could qualify. Moody’s Analytics says the figure could be as high as 1.6 million. Both figures are a fraction of the 11 million or more homeowners who are underwater.
When Will It Start?
Fannie and Freddie will issue full details of the plan to lenders and servicers on Nov. 15, officials say. The revamped program could be in place for some lenders as early as Dec. 1.
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Should You Buy or Rent?
The fact is, when you rent, you are buying. You’re buying a service: the use of a house for a specified period of time. And as long as the rent you’re paying is in line with what others are paying for comparable living quarters, then you’re getting that service at the market rate.
Granted, you don’t have some of the potential plusses of ownership if you’re renting, such as seeing the value of your home climb over the years. But renting has other advantages. You can move more easily, and you’re not on the hook for real estate taxes and upkeep. And the money that would have gone into your house can be spent on other things or go into other assets.
Besides, as recent experience has shown, house price appreciation is hardly a given. Many people who bought during the most recent housing bubble now owe more on their mortgage than their home is worth.
Housing bubbles typically don’t pop like stock bubbles. Instead, home prices usually deflate slowly. Transactions dry up before prices drop because homeowners tend to hang on rather than sell at a loss — as long as they can make their mortgage payments.
For this reason, some real estate experts think the critical relationship is not between home prices and rental costs, but between the housing market and income levels.
That’s not to say a house can’t be a good investment. It can. But whether it is depends on a variety of factors, ranging from the price you pay to the prospects for the market you’re in to the tax advantages you get and how long you remain in the house.
Ask yourself these questions before you make either move, renting or buying:
1 – Why do you want to own? – If you can’t come up with several concrete ways your lives would be better as homeowners, then it may not be worth it to go through the trouble of moving and taking on the extra financial responsibility.
2 – Why Buy Now? – One should never try to time the housing market and buy at the bottom. And while the newly revamped HARP (Home Affordable Refinance Program) could help homeowners who are underwater refinance to a lower rate, the program is not likely to improve the housing market’s prospects immediately. Therefore, home prices are not likely to skyrocket anytime soon.
3 – How Stable is Your Job? – It’s worrisome enough to lose your job knowing you have the obligation to pay rent for the remainder of a lease. But it’s even more upsetting to face unemployment knowing that you’ve got a mortgage and possibly equity at stake in a home.
4 – How Would Buying Affect Your Finances? – Before joining the ranks of owners, take some time to add up how much you would likely have to come up with for a downpayment and other costs. Subtract that amount from your savings balance and then ask yourself whether you would be okay with that as a cushion. Use a mortgage estimate calculator to find out how much house you can afford, and see how your monthly obligations owning compare to rent expenses.
After going over these questions and discussing the issues involved, you should come away with a clearer sense of whether to buy and, if so, when. Even more importantly, your decision won’t be based on the absurd notion that renting is the equivalent of throwing money away. Buying is not for everyone, but you need to make sure it’s the right move to make for your particular situation.
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Decorating Ideas for the Holidays
With Thanksgiving right around the corner, and Christmas soon to follow, decorating your home is one of the first things you can do to get ready for the holidays. However, not all decorations are created equal, and you want to make sure everything you do makes a statement while creating a warm and inviting atmosphere for your house guests. Here are five ways you can decorate your house for the holidays to look like the magazines without breaking the bank.
1. Make a dramatic centerpiece. Whether it is for your living room or dining room, a large centerpiece filled with fall colors, pine, and warm colored candles can instantly be the focal point of the room. For more ideas on how to make one rather than pay a florist, check out this article.
2. Make a fall wreath for your front door. Before your guests even step foot into your home, wow them with a beautiful wreath on your front door. This can be made easily with a few craft store items, and if you use dried materials you can even use it year after year. Here are instructions on how to make a fall wreath.
3. Place warm colored candles around the house. This is really easy: grab 3 tall candles of different lengths and tie them together into a bow with a piece of straw. Then place it on a candle holder. Make sure the candles are fall colors like orange, red, and yellow. This can be placed in the bathroom, in bedrooms, or anywhere longer candles fit in well. Here are more tips on Decorating with Candles.
4. Buy a couple of throw pillows to place on the couch. Have a neutral colored couch? Awesome. Get some fall colored pillows and place them on the couch. You could even add a fall colored throw, after all this season is all about colors. With the centerpiece, candles, and pillows, you’ll instantly notice the room coming together.
5. Have a staircase rail and banister? Wrap white colored lights with multiple thick ribbons and wrap that around the staircase going up. The lights will illuminate the autumn colored ribbons, creating a warm glow. There are lots of ways to decorate for Christmas, and these tips will help spur your creative ideas.
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Aggressive Home Selling Strategies
Selling a house in an extremely competitive market is possible, especially if a seller is prepared to take action to help facilitate attracting a buyer. In a housing market where ‘for sale’ signs are springing up like mushrooms after a downpour, it’s not enough to hire a real estate agent who only puts a sign in the yard, enters the information about the home on the local multiple listing service (MLS), and waits for a potential buyer to find the home.
In a buyer’s market, it is imperative that sellers be more cognizant of the choices and actions they take prior to putting the home on the market. In some instances, it may even be wiser to keep the home off the market until they are fully prepared to offer it for sale. Potential buyers may not reappear to see your freshly painted entryway. How should you prepare yourself for this competitive market?
Here is a brief rundown of a must-do list to get your house noticed and sold:
The Right Agent – Rushing into choosing a real estate agent could be your first mistake in a competitive market. You must begin by interviewing several agents in order to choose the best one available for your individual circumstance, especially in such a competitive housing market.
Begin by asking some standard questions to find out what marketing plans are offered, what Internet presence can be expected, a list of past clients as references, and what type of administrative and communication systems are in place.
The real estate agent who understands the market, who is not interested in appeasing your over-priced value on your house, and who can explain what it means to sell a house in a buyer’s market is the agent for you.
Choose the agent who gives you the straight talk while keeping a good rapport with you, and you will have a successful relationship and sale.
Repairs – It’s time to prepare the home for sale. Aggressive sellers will hire a 
home inspection company to conduct what is termed a "pre-inspection" of the house. This pre-inspection will identify potential defects in the home that will eventually show up through a buyer’s inspection, possibly terminating any offers on the table. By discovering defects and making the corrections well before a buyer has an opportunity to back out, the home will get a second and third showing, resulting in more offers.
When a pre-inspection is conducted, it is best to inform potential buyers of it by leaving a copy of the inspection report at the home as well as have it posted on the multiple listing service. Don’t forget to do those little repairs, too. It’s not just about whether the furnace works; buyers notice things like broken light switches and squeaky doors. It may seem trivial, but each one starts a fingernails-on-the-blackboard response in a buyer which can result in losing a follow-up showing.
Curb Appeal – In addition to making repairs to the actual home, taking a look at 
the landscaping and entry is another key to selling a home in a buyer’s market. Landscaping and your front door has a tremendous impact on the first impression a buyer will get when they first see the home.
You may be thinking that buyers are fickle, and they may very well be. But, regardless of whether you think something like a few flowers and a fresh coat of paint is trivial, your buyer may not. Having a potential buyer come back for a second look because they felt welcomed by the first impression they got at your front step can make the difference between selling and sold.
Photos of your home will be posted on the Internet, printed on flyers, and used in other publications if you have an aggressive agent. Simple things like potted plants, trimmed shrubbery, and neat entries make a difference.
Photographs aren’t very forgiving. You can’t make up for that peeling paint or pile of dead leaves with a clever description of your home or even cinnamon rolls baking in the oven. Pictures are not forgiving, so be sure your landscaping and entry are meticulous, even if you have to postpone your listing until you get it done.
Staging – Take a look at your home from a buyer’s perspective. This is hard to do 
because you have an emotional attachment to your home. But, consider coming into your home for the first time as a new owner. You may have furniture that perfectly matches your green walls, but not everyone does. You may have the perfect kids’ rooms for your toddlers, but not everyone has toddlers. Invest in neutral tone paint and cover up all those lovely colors.
You also need to take a look at replacing carpeting, putting away all your knick-knacks, rearranging your furniture, and even storing most of your items to clear the way for a buyer’s imagination.
Many sellers benefit from hiring a home staging professional. These experts are trained to see the potential, and for understanding how difficult it is to de-personalize your home while it’s on the market. A home staging expert is trained to see homes through the buyer’s eye and will present the home so the buyer actually looks at the qualities and features of the home, rather than be distracted by the stuff the owner either loves or has become immune to.
When selling a home in a buyer’s market saturated with a large inventory of homes for sale, it is imperative sellers take proactive steps prior to putting a for sale sign in the yard. Interview and hire the best real estate agent, review and repair any defects of the home, and properly stage the home so you will maximize the interest each time you show your home.
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Buying a New House? A Checklist of Items You’ll Need
Last month, we looked at a list of "must do" things to consider first before starting to look for a new home. This month, we look at a list of "must-haves" when moving into your first house.
Locks and Keys
All locks should be changed in your new home. This is a good safety tip for moving into any new place, whether it’s a home, apartment or a condo. You won’t have to worry about who has a key to your home when you change the locks.
First Aid Kit
Accidents happen, especially around the house. Whether someone in your home gets hurt while using a tool, or just experiences a clumsy mishap, it’s nice to have a first aid kit close at hand. Your first aid kit should include band aids, scissors, non-latex gloves, tape, gauze, first aid instruction booklet, aspirin, and a thermometer. You might want to include more items, but this is a good collection of basics.
Smoke Alarm
A smoke alarm should be on every level of the house and close to bedrooms where people are sleeping. Remember to check the batteries regularly. It’s a good idea to make a habit of checking the batteries when you change your clocks in the spring (forward) and fall (back). Remember that smoke alarms don’t last forever, and need to be replaced. Many recommend doing this at least every 10 years, if not before.
Fire Extinguisher
It’s important to put fire extinguishers in places where there could be a chance of a fire, like the kitchen or the garage. Remember, fire extinguishers generally require servicing and inspecting by a fire protection service company at least annually.
Tools
When you live in an apartment or a condo, if something breaks there’s a person to call to come and fix the problem. Now that you are a home owner, you’re that person! So you’re going to need some basic tools. Some handy tools to have in the house are a hammer, nails, drill, drill bits, staple gun, tape measure, saw, screw drivers (flathead and Phillips), wrench, pliers, WD-40, and safety glasses.
Yard Tools
Now that you have a home, you also get a lawn to take care of! That means you’re going to need a few tools to tackle yard work. Items include, but are not limited to: lawn mower, shovel, rake, weed eater, push broom, watering can, wheelbarrow, garden hose, lawn sprinkler, edger, blower, and pruners. If you love doing yard work you might need a few more things, but this list is good for those of you who aren’t a big fan of doing yard work. These items will help you get the chore done quicker.
Snow Blower
If you’re in an area where it snows, you’ll be happy to have a snow blower when the first foot of snow falls. And don’t wait around for the first snowfall to get this important tool, either. It’s a good idea to have snow shovels as well. Always have two on hand, that way you can always have a shovel for a helpful friend.
Cleaning Supplies
Hopefully you have these things already, but here is a good list of items every home should have to make house work easier: a vacuum, broom, wet mop, dust mop, dust cloths, furniture polish, dust pan, toilet brush, plunger, window cleaner, sponges, scrub brush, rags, towels, and a bucket.
This list should help you stock your home with essentials that will help making living in your new place a little easier!
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Transitioning Your Home to Autumn
The days are getting shorter, the weather is getting cooler and the air has an aroma that makes you think of apple cider. Autumn is in full effect in many areas already, and soon will be everywhere. Your home should reflect the coziness the change in season brings.
Not sure how to transition from the cool shades of summer to the warm hues of fall? While there are many items available to make your home inviting, these things for fall home décor will make your place look warm and cozy for your guests as they come to visit.
Candles: Choose candle scents that reflect the season – cinnamon, apple pie, marshmallow, fireside, pumpkin, candy corn, etc. If you have children or pets and don’t want to risk an open flame, there are battery-operated ones that are usually accompanied by a timer you can preset for automatic ambiance. Some are vanilla or spice-scented and offer a safe, yet still charming glow.
Artificial Fruit & Vegetables: Search for faux apples, pears, gourds, squash and more at your local craft store. Place them prominently in a wide bowl or basket as a cornucopia, or simply add a couple of pieces on your kitchen windowsill or end tables to add touches of harvest to your home. You can even find them glittered or beaded for a more elegant look – near soft light they sparkle beautifully.
Corn: It’s not just for corn mazes or corn on the cob – it can be a great element for decorating! Tie a bunch together with some raffia and place outside on a bale of hay, or inside, attach them to a wreath or place them in a bowl for a traditional symbol of harvest.
Leaves: A main staple of fall décor is the unique variety of colors and shapes of leaves. Individual silk leaves can be scattered on tables, leaf garlands can be strung across a staircase bannister and a leaf wreath can serve as the focal point of a mantel when hung on a wreath stand. Leaf-themed dinnerware, trays and decorative plates can be found in your local department store, that you can enjoy using all the way through Thanksgiving. If you have young children, you could grab a few leaves outside and they can sponge them on paper for artwork you can frame or hang on the fridge!
Flowers: Hardy mums accompanied by some ornamental cabbage and kale are great for a pop of color outdoors because they can withstand cooler temperatures. Purple Mexican bush sage has purple and white blooms and can reach four feet tall, flowering in September and continuing until frost occurs. If you want to make a container or window box, incorporate variegated ivy, fountain or black mondo grass, mums and a few pumpkins for a spicy seasonal look. Speaking of pumpkins…
Pumpkins: Like leaves, pumpkins are the ultimate symbol of autumn. They are 
easy to find and in various price ranges. Visit your local farmer’s market or grocer for medium and large pumpkins. Visit a nearby cider mill for extra large pumpkins, mini pumpkins and special gourds. Place them on the porch, nestled between the landscaping around your home, or bring a few indoors. Leave them plain until it’s closer to Halloween and then you can turn them into jack-o-lanterns!
Pillows: Add some throw pillows with embellishments to your couch or cozy chair. Square, round or oblong pillows with metallic threads, ruffles or sequins can make for a nice display. But don’t limit yourself to accent pieces in common rooms – body pillows made of micro-suede can be a warmer alternative to the cotton pillowcase it’s currently nestled in for a good night’s rest in your own bedroom.
Table Linens: Whether you have a dining table or server, table linens in fall colors like orange, red, gold and bronze can add elegance to wood furniture. Tablecloths, runners, napkins and placemats can often be found in coordinating sets, complete with napkin rings that tie it all together for a more formal occasion. Dig out those autumn dishes you have hidden in the cabinet and add some tinted wine glasses to wow your guests!
Wood: Bring the outdoors in with distressed wood pieces like log vases or birch-themed pedestals to display candles or flowers. You can incorporate twigs, branches and berry stems for an organic look. For your front or backyard space, take wooden barrels or crates and fill them with leaves, pumpkins and hay for an effortless acknowledgement of the change in season.
Any of these ideas for fall décor will take you straight through the last Thursday of November, when you’ll give thanks and start thinking about your next decorating session which includes snow and ornaments.
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How To Get Your Insurer to Pay Your Disaster Claim
Seems that more and more states are being affected by hurricanes today than any other natural disaster, so we wanted to take a close look at hurricanes and your insurance.
Your big challenge may come in the way of getting your insurance company to pay up instead of trying to deny your claim.
You may have to dig deeper into your pockets, because insurers have been steadily increasing hurricane wind coverage deductibles and imposing other policy limitations, often burying the wording of such in the renewal policy that most consumers don’t even bother to read.
Many homeowners are dealing with this frustration now, in the wake of Hurricane Irene. So we urge homeowners to be vigilant with your insurance company to ensure you receive a full and fair settlement.
How to Boost Your Odds of Getting Paid
Don’t dilly-dally when it comes to reporting your claim: Insurance companies generally handle them on a first come, first serve basis.
Once your claim is filed, be sure to get your claim number and write it down. You’ll need it every time you call to follow up on your claim.
Build Your Evidence
Anticipate the possibility of push-back from the insurance company, and be ready to hit them with documentation. Start a notebook detailing every contact you have with your insurance company or adjuster.
Make a list (detailed) of all your possessions that were affected by any disaster. You should have a complete inventory, including photos, of everything you own before a storm or natural disaster strikes. Also take photos and list any damage you have temporarily repaired since the storm to avoid secondary damage. Most policies require that you “mitigate damages” before the adjuster can get there.
Get repair estimates from a contractor before the adjuster shows up, if possible. Keep all receipts for any emergency repairs you made, and costs such as those associated with staying in a hotel, if your home was not habitable after the storm.
Be Prepared to Fight
Don’t just file a claim then sit back and wait for your check to arrive. Be prepared to check in regularly with your insurance agent or company on the progress of your claim. If you are denied, don’t just accept it. Demand that your insurance company identifies the language in your policy that served as the basis for them denying your claim.
Watch for insurers who try to pull a “gotcha” by putting a limit on replacement cost payments, which might come into play in the event that a home is totally destroyed. A typical cap is 20% above the face value of the policy.
For example, if a home was expected to cost $200,000 to replace and that amount was the limit on the policy, the insurance company would pay no more than 20% more, or $240,000. If the surge in construction costs due to extreme demand caused the price of replacing the home to jump to $300,000, the homeowner would be short $60,000.
Know Your Rights
The squeaky wheel gets the grease. Do complain to the powers that be in the insurance company if you feel like a denial was unwarranted or the reimbursement too little. Don’t stop there. Complain to your state insurance department: It will make an inquiry with your insurer. See a lawyer if you want to take it a step further.
Expect the worst, but hope for the best. Not all insurance companies handle claims badly, so go into the claims process with an open mind. Be vigilant though, or you run the real risk of being shortchanged.
If you were unaffected by Hurricane Irene, take the time now to count your blessings, and do the things you need to do in order to prepare for whatever Mother Nature has in store next. Take inventory of your possessions, especially including taking photographs of everything you own. Then be sure to store those photos somewhere away from your home. If you have photos stored in your home and your home is destroyed, there goes your evidence with it.
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Buying a New House? What You Have to Do First
If you’re moving into the home buying mode, here are some “must do” things to consider first.
What Can You Afford?
You must take your time deciding what you can really afford before buying. It is critical that you know your status financially, inside and out. Only then can you truly know how much you can afford to pay for your new home. Use one of the many online calculators to help you better understand your affordibility. Understand how your income, expenses, and debts, affect what you can and cannot afford.
Where Will You Live?
You should think carefully on where you really want to live. Some things to consider when deciding the location are: Do you have kids? Then you might want to buy a house in a good school district. Not all school districts are the same. For most home buyers with families, buying a home in a good school district is fundamentally important. By doing this, you also enhance your property value when it comes time to sell your home in addition to providing your children with better schooling.
Check Your Credit
You must ensure that your credit history is the best it can possibly be. A few months before you start actually looking for a house to buy, you will need to check your credit score, get your credit report, and do credit repair or credit counseling to ensure your credit is optimal for your situation. It is important that you stay on top of the facts in your credit report and remedy any problem that arises.
Which Mortgage is Right for You?
The next step is to choose the right mortgage loan for your situation. Deciding on the right type of mortgage can be an experience equivalent to being in the middle of a minefield. There are so many choices from: fixed or adjustable rate mortgages, interest-only or sub-prime mortgages, and many more. So how do you know which mortgage is best for your current financial situation and as well as your long-term goals? Well, you can seek the help of a trusted mortgage broker or lender for expert advice and personalized service. Moreover, a trusted personal mortgage consultant gives you competitive low rates to meet your needs. In order to learn more about the subject, you can start by arranging a complementary consultation with an expert mortgage consultant. You can locate a local mortgage consultant in your area by using any mortgage directory you can find online or offline.
Get Pre-Approved
Get your loan pre-approved before actually beginning your home search. When you have done the above steps and already determined how much your home budget is and have optimized your credit, it is time to get pre-approved for a home loan. Being pre-approved for a mortgage means it will save you time and money by better positioning you to make an earnest offer for that perfect house when you find it. Unlike a pre-qualification which is based on a brief review of your financial situation, pre-approval from a mortgage lender involves an in-depth analysis of your actual income, expenses, debt, and credit history, which of course is a whole lot better than just being pre-qualified.
Following these steps ahead of finding your new home will make things much less stressful versus having to rush to do these things once you’ve already found the home you want.
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Home Affordability Remains High
Home affordability levels remain at near record highs. According to Bob Nielson, chairman of the National Association of Home Builders (NAHB), “At a time when homeownership is within reach of more households than it has been for more than two decades and interest rates are at historically low levels, the sluggish economy and the extremely tight credit conditions confronting home buyers and builders remain significant obstacles to many potential home sales.”
Unfortunately, this high level of affordability, alongside historically low interest rates, has not translated into more sales. Existing-home sales declined in July, down 3.5 percent from June.
Lawrence Yun, NAR chief economist, said “affordability conditions this year have been the most favorable on record dating back to 1970, but many buyers are being held back because banks are offering financing to only the most highly qualified borrowers, ignoring a large share of otherwise creditworthy buyers. Those potential buyers represent the difference between an uneven recovery and a much more robust housing market that could stimulate additional economic activity and create jobs.”
The NAR reports that the national median existing-home price was $174,000 in July, down 4.4 percent from July 2010. Distressed homes still made up nearly 1/3 of the market, at 29 percent.
According to the Mortgage Banker’s Association’s (MBA) Chief Economist, Jay Brinkmann, “While overall mortgage delinquencies increased only slightly between the first and second quarters of this year, it is clear that the downward trend we saw through most of 2010 has stopped. Mortgage delinquencies are no longer improving and are now showing some signs of worsening. The good news is the continued decline in long-term delinquencies, those mortgages that are three payments or more past due. The bad news is that drop is offset by an increase in newly delinquent loans one payment past due.”
The MBA reports that foreclosure start rates fell to their lowest level since the fourth quarter of 2007. Foreclosure inventory rates also fell, to their lowest level since the third quarter of 2010. Foreclosures could be losing steam, meaning prices and the market as a whole could be headed toward stabilization.
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Some first time home buyers as well as experienced home buyers sometimes have a difficult time searching for and comparing home loans.
Credit cards are a double-edged sword. If you’re not careful, they can destroy your financial life. But if you know how to manage them, they’ll treat you right with all sorts of rewards.