Are You Covered?

The neighbor kid is over again. He roams around your house with his shoes on, drinks your milk out of the carton, and is always whining. On top of that, he’s constantly bouncing on the blasted trampoline. You’ve warned your kids not to do flips, but he doesn’t seem to think those rules apply to him. You watch as he jumps one, two, three times and flips…off the edge. Yep, that’s a broken arm. This time he’ll learn. Sucker!

Except that you might be the sucker if you haven’t checked out your home liability insurance policy recently. After all, if the neighbors wanted, they could sue you because their kid didn’t follow your rules and got himself hurt. Fair? Maybe not, but you’ll want to know what home liability insurance is and what your policy covers to make sure you’re insured against accidents like this one. [Read more…]

To HOA or not to HOA

When you hear Homeowner Associations, you probably immediately conjure up images of old ladies with blue hair, sitting around all day, tattling on their neighbors for breaking the rules. Like buzzards waiting for something to die, they spy on you between their blinds and the minute you hang something from your balcony, even for a minute, they’re on the phone, getting you in trouble.

Okay, that may be a bit of a dramatization on my part. Homeowner Associations do actually have inherent worth. But what is that worth? Have you ever wondered what are the benefits (and real drawbacks) of an HOA? If you ever find yourself or a friend in the market to purchase a home or condo with an HOA, trust me, you’ll want to know these little tidbits. They can weigh heavily on your ultimate decision to purchase. Here are our top 3 benefits and drawbacks of a Homeowner Association (and their fees).

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Myths about Homeownership Keeping You from Buying?

Do you know the basics of home buying? Check! Do you consider yourself financially responsible? Of course! Do you have a rainy day fund? Um, duh. Do you think it’s a good time to buy a home? Yes! It turns out that the majority of Americans (even millennials) answer in the affirmative to all of these questions, and more.

However, in a national survey just released by Wells Fargo and IPSOS Public Affairs it’s obvious that average Americans think they know more than they really do about homes and home buying. And the result is this: myths of home buying and home ownership keep otherwise well qualified home buyers from seriously considering purchasing a house. Read on to see how much you really know!

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I Keep Hearing “This Loan Insured By,” What Does It Mean?

There’s a term that always floats around the mortgage and real estate industries called “mortgage insurance”. You hear it often because some of the most prevalent loans of recent—FHA loans—require both one-time, up-front mortgage insurance as well as monthly mortgage insurance on high loan-to-value loans.

Unfortunately, nobody seems to eager to explain this to you or tell you what its impact is on your home loan… until now! We’ve done a bunch of research on your behalf to give you a nice, easily digestible article about what mortgage insurance means. So, here are five things you need to know about mortgage insurance.

It’s Like Regular Insurance, But Not

Mortgage insurance is a type of insurance. It protects someone in the event of a loss. In this case, it protects the mortgage company against losing money should you quit paying for your mortgage. That’s kind of where the “like regular insurance” part ends. Because even though it protects the lender, you as the borrower are the one who pays it.

There Are Two Types of Mortgage Insurance

You have to get mortgage insurance on pretty much any loan with less than 20 percent down. There are, however, two types of mortgage insurance. There’s private mortgage insurance (PMI), which you usually get with a conventional loan, and there’s government mortgage insurance, which you get with an FHA or VA loan. Government mortgage insurance has an up-front premium as well as a monthly premium.

To Be Fair, It’s Not Always Required

It’s true; you don’t always have to pay mortgage insurance. Typically mortgage insurance is only required on loans when the down payment is less than 20 percent. So, if you’ve got a sizeable enough down payment saved up, you’re good. Otherwise, plan on paying mortgage insurance.

Even If You Have To Pay It, It Won’t Last Forever… Mostly

Now, private mortgage insurance can usually be canceled when you reach over 20 percent equity in your home. Typically, you’d call your lender, request to have your PMI removed, get an appraisal, and boom(-ish). (Note, this will not happen automatically so you’ll want to be proactive about it.)

With government mortgage insurance however, it’s not so rosy. Starting in 2013, if you get a loan with less than 10 percent down, you’re going to hold on to that mortgage insurance for the life of the loan. If you achieve equity and/or pay down your mortgage, you may want to look into refinancing to remove mortgage insurance.

Even Though It Stinks, It’s Probably A Good Thing

Mortgage insurance may seem like kind of a racket. You pay the premiums on something that covers the guy on the other side, you don’t get to pick whom it comes from, and you might be stuck paying it forever.

That being said, without the invention of mortgage insurance, people with less than 20 percent down probably wouldn’t be able to purchase a home, period. I bet that would put a lot of people (including most of you reading this) out of homeownership’s reach.

Mortgage 101: Understanding Your Debt-To-Income (DTI) Ratio

Those of us in the mortgage and real estate industry often throw around acronyms. At times, it can be a veritable alphabet soup. I often catch myself rattling off things like APR, FHA, and HUD as if everyone around me knows exactly what I’m speaking about.

While many of the times I mention these acronyms, I should simply be ignored, some of them have important meanings—meanings of which everyone should at least have a basic knowledge. One such important acronym is DTI which stands for Debt-To-Income. This article will explain what DTI is, and why it’s important in determining how much mortgage financing you might receive. [Read more…]

Eight Housewarming Gifts Under $50

Your friend just bought a new house. Hooray! Now it’s time for that housewarming party. You’re a little nervous because you consider yourself to be gift giving challenged, and tend to stress out about the details, expense, personalization and usability of what you give.

Luckily, buying housewarming gifts can be easy. We love being able to buy things from the comfort of our own pajamas and without breaking the bank. So, to help you out, here is a list of eight unique housewarming gifts under $50 to serve as your go-to guide. [Read more…]