Privacy-Minded Home Security Options for the Camera Averse

As a homeowner, security and privacy can be an important priority. Learn about how to secure your home without always keeping a watchful eye.

Guest post by Eric Murrell 

It’s never been easier to secure your home, thanks to an abundance of new gadgets on the market. Setups that once required professional installation and thousands of dollars in highly technical equipment are now easy to put together with off-the-shelf products and a few inexpensive apps. It’s a great time to be a consumer, and frankly, a bad time to be a criminal.

All of these new gadgets and services are great, but what if you’re worried about your privacy? Hacks and security breaches in the news—or simply the fear of loss of privacy between family members—have made some people uncomfortable with a camera-based security system inside their home. Thankfully, you can still make high-tech upgrades to your home to keep you safe without always keeping a watchful eye.

The first option to consider is a modern twist on a classic home security setup: motion sensors. Whether it’s a motion-sensitive light on your front porch or a few sensors placed around the home, motion-activated lights and alarms can be a surprisingly effective deterrent to the average thief.

Using today’s smart home technology, it’s easier than ever to add battery-operated sensors to strategic spots around your home. Both inexpensive and easy-to-install, these new sensors can trip lights and alarms like the old ones, but can also pair with a smart home hub to send instant alerts to your smartphone the moment an intruder is detected. Take a close look at your new thermostat or other smart devices; many include motion sensors that are already built-in.

To add an additional layer of security, purchase smart door and window sensors that serve as a first line of defense from the outside world. Like the motion sensors, inexpensive models are available that integrate with most smart home platforms. It’s simple to configure open and closed alerts, but you might find it even more helpful as a passive form of home security. Worried that you forgot to close the garage door after letting the dog out? By taking a quick glance at an app while you work, you can know for sure.

Even if you rule out in-home smart cameras, do consider having smart cameras outside your home so you can see if packages are delivered and if there are any trespassers in your yard. The most well-regarded systems now include location-based privacy features that use your smartphone to automatically adjust their settings, offering an unprecedented combination of privacy and security. Using the GPS signal from your phone, it’s easy to activate your full security network when you leave the house, and have the cameras automatically turn a blind eye the second you pull in the garage.

Security is personal for every family. Explore your device options, and even ask your internet service provider if they offer a home security solution, as bundling services often results in additional savings. Likewise, your ISP may offer the ability to control all of your existing home security gadgets from a centralized app. Whether you install array of sneaky sensors or smart locks, there are a wealth of connected home devices that can help keep your family safe without betraying their privacy. A good night’s sleep is only an app away.

Source: Coldwell Banker Blue Matter Blog

Posted on September 12, 2017 at 3:36 pm
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8 DIY Projects That (Surprise!) Require Permits

Your insurance company won’t be on your side if something goes awry with your renovation and you don’t have a permit.

“Eh, we’ll just knock it out this weekend, not going to worry about the permit”… not so fast there partner. No shooting from the hip here! You can not only get into trouble with your insurance company and the local building department, but when it comes time for you to sell? You better have that permit in hand for these DYI improvements.

You might roll your eyes at having to get a permit before doing a DIY project around the house, but permits serve a purpose.

Permit requirements are just ways for the city to nickel-and-dime you to death, right? Is your city invading your privacy by caring whether you want to replace your overhead light fixture with a ceiling fan?

Before you get too worked up, realize that cities have their reasons for requiring permits. “Obtaining a permit means that someone knowledgeable will review your plans and help spot mistakes before you begin the work,” says Rick Goldstein, an architect and co-owner of MOSAIC Group in Atlanta, GA. If you make improvements without a permit, you might receive a big, fat denial letter from your insurance company when something goes wrong and you want to cash in.

You know the phrase “You don’t know what you don’t know”? Well, that’s the way it is with permits. That ceiling fan might be too heavy to hang from a box designed for a simple light fixture, especially when it’s going full blast and vibrating. You don’t want the fan falling on you while you sleep!

You might know some projects that require a permit, but you might be surprised by these eight DIY projects that typically require a permit too.

  1.  Installing a gas stove

    Many people are making the switch from an electric to a gas stove. Depending on where you live, gas could be much cheaper, and if you’re a foodie, food just tastes better cooked over fire. But if installed incorrectly and the gas leaks, it could be extremely harmful. Get a permit and make sure someone is checking behind you to catch any mistakes.

  2.  Replacing windows or doors

    If you think this project seems pretty straightforward, think again. For windows, you need a permit to ensure emergency egress requirements are met in case first responders need to get in. If windows and doors aren’t properly installed, water could get into the house. No one wants a side of mold with their renovations.

  3.  Building a deck

    When dreams of outdoor living beckon, first call the permit office. If your deck isn’t structurally sound, or if you used untreated lumber that decays, your deck could collapse, and that could really interfere with your meditation mantra. And don’t even try to guess how to meet building codes for railings. Be safe and get that permit.

  4.  Putting up a fence

    “Building a fence requires a survey and a permit,” Goldstein says. The reason for this is usually to ensure you aren’t violating city ordinances by building a fence too high in your residential subdivision or choosing one with barbed wire in the middle of the city. If you build a fence without a permit, you might receive a stop-work order.

  5.  Installing a storm shelter or safe room

    If you want protection from tornadoes (and hurricanes), you might consider installing a shelter. But unless you design and construct this room to FEMA specs, you might not be so safe after all. A huge benefit of a prebuilding permit is that you can register it. “If there is a tornado in your area, first responders will know who has storm shelters and where they need to look for you in case you get trapped inside,” says Blake Lee of F5 Storm Shelters in Tulsa, OK.

  6.  Remodeling a kitchen or bathroom

    Picking out the perfect granite for your countertops and finding just the right fixtures and cabinetry aren’t the only things on your checklist. If you neglect to get a permit for major remodeling work, you might not be able to easily sell your home in the future.

    “If an inspector catches this kind of thing, or if a bank wants to make sure it’s covered against all liability and demands to see the permit before funding a mortgage, this can potentially be a major time and money sink to rectify,” says Kimberly Wingfield, a Philadelphia, PA, real estate agent and DIY fanatic.

  7.  Installing new electrical wiring

    Your house in the historic district simply isn’t wired for all your gadgets — but an amateur electrical wiring job could cause a fire. This project definitely needs a permit.

  8.  Replacing a gas water heater

    Surely you can replace your old water heater without a permit, right? Nope. Although many DIY enthusiasts do it all the time, if it’s done wrong, a fire or flood could ensue, or if gas escapes …kaboom. These risks leave a huge potential for serious injury. A permit also means that an inspector looks over your completed job to ensure it was done properly. This is a huge confidence boost in the knowledge that your work is up to code — and minimizes the potential for home-sale complications down the road.

    Source: Trullia Blog

 

 

Posted on July 26, 2017 at 3:27 pm
Kappel Gateway Realty | Category: DIY, inspections, insurance, maintenance, permits, projects, real estate, Uncategorized, upgrades | Tagged , , , ,

6 Flood Insurance Myths Debunked

If you live in a designated flood zone that requires flood insurance, then you need to understand your policy. What is covered and (more importantly!) what is NOT!

If a flood swamps your home, will insurance cover the damage?

That depends on the value of your home, the amount of water damage and whether you have a flood insurance policy.

Regular home insurance doesn’t cover flooding. You’ll need a policy offered through the government’s National Flood Insurance Program (NFIP)—but note that those top out at $350,000 in coverage for your home and its contents. For higher amounts, you may need supplemental coverage to protect your savings from taking a hit.

People tend to associate floods with a total loss, but the average flood claim for U.S. homeowners is about $39,000, according to the NFIP.

Here are six other persistent myths about flood insurance—and the truths you need to know.

To Get a Policy, You Must Live in a Flood Plain
Not true. If you live in a flood plain, your mortgage company will likely require you to buy flood insurance, but you can purchase it even if you don’t live within a flood zone.

“Almost anybody can get flood insurance who wants flood insurance,” says Chris Hackett, director of Personal Lines for the Property Casualty Insurers Association of America.

The price through the federal flood insurance program is based on standardized rates and depends on the home’s value and whether or not it’s in a flood plain, says Don Griffin, vice president of Personal Lines for the Property Casualty Insurers Association of America.

The average price for flood insurance is about $660 annually. Your agent can help you buy a policy and may accept payment by credit card.

According to Griffin, one in four flood claims is for a home not in a flood plain.

Flood Insurance Is Just for High-Risk Areas
Merle Scheiber’s dream home wasn’t in a flood plain, and he didn’t have flood insurance.

Just after completing a three-year renovation project for his 1,800-square-foot, cabin-style home, flooding put it underwater for almost four months.

Scheiber, who happened to be South Dakota’s director of Insurance at the time, says he had to tear the home apart and put it back together all over again.

He urges that all homeowners—even those who do not live in designated flood plains—weigh the dangers and their options and seriously consider buying flood insurance.

Flood Insurance Covers Everything
Not necessarily. When it comes to the physical structure of your house, federal flood insurance policies top out at $250,000. If you have a $300,000 house that’s a total loss because of a flood, the most you can recoup through the program is $250,000 to cover the structure itself.

For your personal possessions, the cap is $100,000 under the federal program.

If you already have insurance through the federal program, then you can buy “excess flood insurance” through a private carrier that would cover claims above the national limits. In essence, it’s a flood policy with a $250,000 deductible, Griffin says.

Note that flood insurance doesn’t cover living expenses if you have to relocate while your home is being repaired.

My Homeowners Policy Covers Floods
“Unfortunately, a lot of folks may be under the impression that their standard homeowners policy might cover flood damage,” Hackett says. But the standard policy doesn’t.

The typical home insurance policy doesn’t cover earthquakes or floods, so a homeowner wanting coverage for either of those disasters will need to pick up separate, specific coverage against those types of disasters.

If you want flood insurance, it pays to think ahead. There is a 30-day waiting period between when you buy the coverage and when it kicks in. When a hurricane is bearing down on your area, it’s too late to get a flood policy.

Water Damage Is Water Damage
When it comes to your insurance, not all water damage is the same.

If there’s a storm and your “roof comes off and water comes through, that would be covered under your homeowners policy,” Hackett says, “versus a flood situation where the riverbank overflows and you look out of the front of your house and you need a boat to get from point A to point B.”

Most consumers “have a pretty good understanding” of how to draw the line between storm damage and flood damage, he says.

Some homeowners policies offer an optional “water-backup endorsement” that covers damage from water backing up into your home from causes such as a broken sump pump.

Flood Maps Don’t Change
Flood plains (and flood plain maps) change and evolve. Just because you weren’t in a flood plain when you bought your home a few years ago doesn’t mean you’re not in one now.

There are a couple of ways you can find out about your flood risks.

  • FloodSmart.gov: This site will allow you to put in your address and see if it’s in a flood plain, and give you information on risks, premiums and agents. But use it as one tool, not the final word on whether your home is in a flood plain.
  • Your insurance agent: When it comes to researching whether your home is in a flood plain, you definitely want someone knowledgeable to research the question for you—and, you might want to get a second opinion from a different agent.

“Agents have different levels of sophistication with regard to this product,” says Griffin. “You get a different answer sometimes. So you make a couple of checks to make sure you’re protecting yourself.”

Posted on June 30, 2017 at 11:01 am
Kappel Gateway Realty | Category: damage, flood insurance, insurance, maintenance, real estate, Uncategorized | Tagged , , , , , , , , , ,

First-Time Homeowners: Everything You Need to Know About Homeowners Insurance

Oh my…this is a MUST READ for First Time Home buyers!  Don’t leave home without it!

What exactly is home insurance and do I really need it?

Ready to buy your first home? Before you dot the I’s and cross the T’s on your mortgage, it is important to understand the ins and outs of homeowners insurance.

Without homeowners insurance, a property buyer is unlikely to secure a house. Homeowners insurance protects a residence and the items stored in a residence against disasters. Therefore, if your home is suddenly destroyed in a hurricane, tornado or other natural disaster, homeowners insurance guarantees you are fully protected.

Homeowners insurance should be simple, but there are many factors to consider as you evaluate all of the coverage options at your disposal.

Now, let’s take a look at five common questions about homeowners insurance.

  1. Why Do I Need It?

There are two reasons why homebuyers must purchase homeowners insurance:

  • It enables you to protect your assets. Homeowners insurance safeguards the structure of your home and your personal property. It also protects you against liability for injuries to others or their property while they are on your property.
  • Your mortgage lender probably requires you to have it. Most lenders will require you to maintain homeowners insurance for the duration of your mortgage. A lender usually will require you to list the company as a mortgagee on your homeowners policy. Moreover, if you let your homeowners coverage lapse, your mortgage lender likely will have your home insured at a much higher premium and with less coverage that what you had in the past.

Homeowners insurance is a must-have for homeowners, without exception. If you allocate the time and resources to find the right homeowners coverage, you should have no trouble protecting your house and personal belongings for years to come.

  1. How Does It Work?

Generally, homeowners insurance is considered a package policy because it includes a combination of coverages. The package policy focuses on the following areas:

  • Dwelling: Covers the costs associated with damage to your home and structures attached to it, including any damage to electrical wiring, heating systems or plumbing.
  • Other Structures: Ensures you’re protected against damage to fences, garages and other structures that are on your property but not attached to your house.
  • Personal Property: Guarantees you’re covered for the value of possessions like appliances, clothing and electronics if they are lost or damaged. This coverage applies even when your personal property is stored off-site, like in a storage unit or college dorm room.
  • Loss of Use: Provides financial assistance to help you cover some of your living expenses if you need to temporarily vacate your house while it is being repaired.
  • Personal Liability: Offers protection against financial loss if you are sued and found legally responsible for injuries or damages to someone else.
  • Medical Payments: Covers the medical expenses for people who were hurt on your property or by your pets.

Clearly, there’s a lot to consider as you evaluate a homeowners policy. Review your coverage options closely, and you may be better equipped than other homeowners to secure your house and personal belongings effectively.

  1. Are There Homeowners Coverage Limits?

You should get homeowners insurance that covers the full replacement cost of your home, not just the market value of your residence.

The replacement cost and market value of a residence may seem identical at first. But upon closer examination, it becomes easy to understand why you’ll want to purchase a homeowners policy that offers protection for the full replacement cost of your house.

For homeowners, the replacement cost refers to the total amount it would cost to rebuild or replace your home if it was completely destroyed. This cost may vary based on your home insurance provider and usually accounts for the plans and permits, fees and taxes and labor and materials that you would need to replace your house. However, the replacement cost does not account for the value of the land associated with your home.

On the other hand, the market value reflects what your home is worth today. It fluctuates based on the current condition of your house, the real estate market and various economic factors.

The market value of your home commonly proves to be great indicator of what your house may be worth if you intend to sell it in the near future. Conversely, when it comes to homeowners insurance, it is always better to err on the side of caution. If you calculate the full replacement cost of your home, you can insure your residence appropriately.

  1. Are There Optional Homeowners Insurance Coverages?

Believe it or not, a standard homeowners policy won’t cover everything. As such, you may want to consider adding some of the following optional coverages to supplement your homeowners policy:

  • Flood Insurance: Floods rank among the top natural disasters in the United States, and even an inch of water can cause severe property damage in a short period of time. The National Flood Insurance Program (NFIP) offers flood insurance coverage that will protect your home for up to $250,000 and your personal property for up to $100,000. Keep in mind that there often is a 30-day waiting period before a flood insurance policy goes into effect. This means if you want to buy flood insurance in the days leading up to a hurricane, you may be out of luck.
  • Earthquake Insurance: Many Western states are prone to earthquakes. In California, Oregon and Washington, earthquake coverage is available from multiple insurance providers. Or, if you live outside these states and still want to purchase earthquake coverage, your state’s Department of Insurance can help you find licensed earthquake insurers.
  • Daycare Coverage: If you take care of a friend’s children and are unpaid, your homeowners insurance offers limited liability coverage. Comparatively, if you provide daycare in your house, you will need to purchase insurance to cover the related liability.
  • Additional Liability: You can purchase additional liability coverage any time you choose. These add-ons may require a nominal premium but sometimes makes a world of difference for homeowners.

Of course, if you’re unsure about which coverages you need, it always helps to consult with an insurance agent. This insurance professional will be able to respond to your homeowners insurance concerns and queries and help you get the coverages you need, any time you need them.

 How Much Will It Cost?

 There are several factors that will affect your homeowners insurance premium, including:

  • Attractive Nuisances: If you have an attractive nuisance like a swimming pool or trampoline, you may have to pay more for homeowners insurance than other property owners.
  • Coverage Options: Adding flood insurance, earthquake insurance and other coverages may cause your homeowners insurance premium to rise.
  • Home Protection System: If you have a home burglar alarm, security devices for windows or deadbolts on doors, you may be able to lower your insurance premium.
  • Pets: Some insurance providers won’t offer homeowners coverage if you own certain types of pets.
  • The Home Itself: Your house’s age, condition, construction and distance from a fire department and water source may impact your homeowners insurance premium.

Homeowners insurance premiums will vary from person to person. But those who take an informed, diligent approach to homeowners insurance can boost their chances of getting the best homeowners policy at the lowest rate.

Homeowners Insurance Tips

Let’s face it, homeowners insurance can be confusing, particularly for those who are searching for coverage for the first time. Lucky for you, we’re here to help you discover the right homeowners policy.

Here are five tips to help you secure homeowners insurance that meets or exceeds your expectations:

  • Shop around. Meet with various homeowners insurance providers and learn about different types of coverages so you can make an informed homeowners insurance decision.
  • Bundle your homeowners and car insurance policies. In some instances, you may be able to save between 5 and 15 percent if you purchase your homeowners and car insurance from the same insurance company.
  • Minimize risk across your house. Homeowners insurance offers immense protection, but you also can install storm shutters, enhance your heating system and perform assorted home upgrades to reduce risk across your home.
  • Look at your credit score. With a good credit score, you may be able to lower your homeowners insurance premium. If you don’t know your credit score, you can request a free copy of your credit report annually from each of the three credit reporting bureaus (Equifax, Experian and TransUnion). Keep in mind that only some carriers use credit scoring.
  • Stay with an insurer. If you find an insurance company that you like, stay with this company for several years, and you may be able to reduce your homeowners insurance premium over time.

There is no need to settle for inferior homeowners coverage. If you use the aforementioned tips, you can purchase homeowners insurance that guarantees your home and personal belongings are fully protected both now and in the future.

Source:  CB Blue Matter

Posted on May 30, 2017 at 7:49 pm
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MUST DO’s Before you move into your new home!

The moving frenzy never ends: Even after you close, the to-do lists drag on and on—endless pages of bullet points that keep you up at night when all you want is to begin your new life. Some of them are fun, like redecorating and buying new furniture.

 Others, not so much.

“When you move into a new house, you’re more concerned with decorating and taking stuff out you don’t like,” says Kevin Minto, president of Signet Home Inspections in Grass Valley, CA. “But let’s not forget about the less romantic things that are mundane—but more important in the long run.”

Once you’ve got the keys, feel free to give yourself a break. You deserve it! But don’t rest on your laurels too long—and make sure to do these eight things right away.

1. Change the locks

Before moving even one tiny piece of furniture into your new home, change the locks—or at least have them rekeyed. It’s not that you don’t trust the sellers (who are, we’re sure, perfectly respectable and upstanding citizens). It’s that you shouldn’t trust everyone who’s had contact with those keys over the years, any of whom could have copied the keys for some unsavory purpose.

2. Change the alarm batteries

Making sure your fire and carbon monoxide detectors have fresh batteries may not seemlike a pressing issue while you’re in the middle of a stressful move (and aren’t they all), but it’s the kind of thing that gets ignored and then forgotten. Better to deal with it now, when the home is empty and you can make a quick sweep of the house—without lugging a ladder around furniture.

3. Review your home inspector’s report

Can’t find your inspector’s report? Minto says reports are often filed with the escrow papers—but don’t wait until something goes wrong to pull them out. A good home inspector will outline the most important issues in their report, so use their expertise as a guide for your first few days of ownership. If they’ve marked anything as particularly pressing, make sure to handle it before moving in.

4. Find the circuit breaker

If you were there during inspection, you should know where your junction box is, but if you don’t, finding it “should be the first and foremost thing that should be attended to,” Minto says. During a move, when you’re plugging all sorts of electrical doodads into the wall, you don’t want to be lost in the dark hunting for that elusive metal box. (While you’re there, find the water shut-off, too.)

Then, get familiar: If it’s not already well-marked, have your spouse or another family member stand in different parts of the house while you flip different switches, and make a note of which ones handle different rooms.

5. Deal with any water problems

Looking at that inspector’s report? Deal with water-related issues immediately, says Minto. These tend to be troublesome because they’re so easily ignored—”out of sight, out of mind,” he says. A leaky toilet might seem minor, but the steady drip can damage internal structural components.

Check your roof, too: If the rubber vent boots on your roof are leaking, you might not know it for a while.

“By the time they see it in a ceiling, there’s been a fair amount of water,” Minto says.

6. Caulk everything

This one isn’t mandatory, but caulking is a whole lot easier if you do it when the house is empty, letting you see all the nooks and crannies that might need a little sealing—and don’t forget the exterior. Minto says he sees caulking issues on “every home,” and while they might seem minor, it doesn’t take long before cracking gives way to leaks and even more water issues.

7. Plan your emergency exits

Before you begin bringing in furniture, walk through every room and decide how you would escape in an emergency. This can help

Posted on March 4, 2017 at 11:47 pm
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The Effect of Environmental Hazards on Home Value

 

There are several factors that weigh on home value, including condition, location, and—in areas where they are most pronounced—environmental hazards such as poor air quality.

According to the ATTOM Data Solutions recent Environmental Hazards Housing Risk Index, 17.3 million single-family homes and condominiums have a high risk of an environmental hazard, with Denver, Colo., San Bernardino, Calif., and Curtis Bay, Md., facing the highest risk. Environmental hazards include brownfields, or property contaminated (or potentially contaminated) by a hazardous substance, polluters, poor air quality and superfunds.

“Home values are higher and long-term home price appreciation is stronger in zip codes without a high risk for any of the four environmental hazards analyzed,” says Daren Blomquist, senior vice president at ATTOM Data Solutions. “Corresponding to that is a higher share of homes still seriously underwater in the zip codes with a high risk of at least one environmental hazard, indicating those areas have not regained as much of the home value lost during the downturn.

“Conversely, home price appreciation over the past five years was actually stronger in the higher-risk zip codes, which could reflect the strong influence of investors during this recent housing recovery,” Blomquist says. “Environmental hazards likely impact owner-occupants more directly than investors, making the latter more willing to purchase in higher-risk areas. The higher share of cash sales we’re seeing in high-risk zip codes for environmental hazards also suggests that this is the case.”

In areas with a “very high” brownfield risk, 17.2 percent of properties are “seriously underwater,” according to the Index; in areas with a “very low” brownfield risk, 8.9 percent of properties are seriously underwater. Median home prices in very high brownfield risk areas are 2.8 percent below 10 years prior, while median home prices in very low brownfield risk areas are 2.8 percent above 10 years prior. Home sellers in very high brownfield risk areas gained 25.3 percent on average at sale, while sellers in very low brownfield risk areas gained 18.9 percent.

In areas with a very high polluter risk, 12.7 percent of properties are seriously underwater, compared to 9.2 percent of properties seriously underwater in very low polluter risk areas. Home sellers in very high polluter risk areas gained 16.6 percent on average at sale, while sellers in very low polluter risk areas gained 27.7 percent.

For areas with a “low” or “moderate” risk of poor air quality, home sales volume has increased 26 percent in the past five years, according to the report; for areas with a “high” risk of poor air quality, home sales volume has increased 16.5 percent in the past five years, while in areas with a very high risk of poor air quality, home sales volume has increased 3.3 percent over the past five years.

Median home prices in very high superfund risk areas are 1.5 percent below 10 years prior. Home sellers in high superfund risk areas gained 19.6 percent on average at sale, while sellers in very low superfund risk areas gained 24.4 percent.

Source: Rismedia

Posted on February 28, 2017 at 7:55 pm
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What You Need to Know Before Buying Mortgage Insurance

If you’re like many borrowers who have less than 20 percent of a home’s value in equity or saved for a down payment, you need to know how mortgage insurance affects the cost of buying a home.

What Is Mortgage Insurance?
Mortgage insurance—also known as private mortgage insurance, or PMI—protects lenders from default on conventional mortgages in cases in which the borrower contributes a down payment of less than 20 percent of the home’s purchase price. PMI is different from homeowners insurance, which protects the home and what’s in it. It’s also different from mortgage protection insurance or mortgage life insurance, which is an insurance policy that pays off the mortgage loan if the borrower passes away. Mortgage insurance is beneficial to both lenders and borrowers. Mortgage insurance lowers a lender’s risk of giving a loan to borrowers with a low down payment. It also benefits the borrower, who, with mortgage insurance, might now qualify for a mortgage he wouldn’t otherwise get approved for.

What You’ll Pay for Mortgage Insurance
The cost of mortgage insurance depends on the type of home loan you have. You could pay anywhere from 0.3 percent to 1.15 percent of your home loan, according to realtor.com®.

Although insurance premium payments usually get paid monthly, you might have the option to pay it up front at closing or roll it into the home loan cost. Check with your lender.

Mortgage Insurance for Different Types of Home Loans
Mortgage insurance programs vary depending on the type of home loan. Generally, mortgage insurance is required when you get a conventional mortgage and put down less than 20 percent, or when you refinance a mortgage and your home equity is less than 20 percent.

Other types of mortgage insurance include:

  • Federal Housing Administration mortgage insurance (mortgage insurance premium): An MIP is required for all FHA loans. All borrowers pay their mortgage premiums directly to the FHA, and premiums are the same for everyone regardless of credit score—though if your down payment is less than 5 percent, you can expect to pay a little more. If you get an FHA loan, budget for both monthly MIP costs as part of your regular payment and an upfront payment included in your closing costs. FHA mortgage insurance rates are usually about 0.625 percent.
  • U.S. Department of Agriculture home loan insurance: U.S. Department of Agriculture insurance covers USDA home loans. It’s a lot like FHA mortgage insurance but less expensive. USDA home loan insurance requires making a payment both at closing and as part of your monthly payments. You have the option to roll the upfront cost into your mortgage, but if you do this, you’ll increase both your monthly payment and your overall loan cost.
  • VA home loan guarantee: VA loans come with a mortgage guarantee instead of mortgage insurance, but it provides similar benefits. Instead of a monthly mortgage insurance premium, you’ll pay a funding fee upfront. The fee amount varies depending on factors like your military service type, down payment amount, disability eligibility, whether you are purchasing or refinancing, and if you’ve had a previous VA loan.

Alternatives to Mortgage Insurance
Although there are benefits to mortgage insurance, having it adds to the cost of getting a home loan. If you want to cut costs or are ready to get rid of PMI, consider these five alternatives to mortgage insurance.

Pay a higher interest rate.
When financing a home, some lenders might offer the option to avoid PMI by accepting a higher interest rate. If you choose this option, the higher mortgage rate cannot get canceled, so you’ll have to refinance to lower your rate in the future.

Get your home reappraised.
If you believe you now have at least 20 percent equity in your home due to renovations or the rising local property values, get your home reappraised. You might have enough equity to cancel your mortgage insurance, but you’ll have to pay for the appraisal up front.

Get a piggyback loan.
Whether your lender calls them piggyback loans or piggyback mortgages, these home equity loans or credit lines enable borrowers with low down payments to borrow more money. Before applying or signing for one, review the fine print carefully to see if your total monthly cost is actually cheaper than paying for mortgage insurance.

Ask your lender about other programs.
Some lenders offer programs that don’t require mortgage insurance, even with down payments below 20 percent, though you’ll likely have to prove that you have excellent credit to qualify. Before talking to your lender, focus on building your credit history, especially if you or your spouse has bad credit.

Save more for a down payment.
Sometimes it pays to wait and save up or to choose a home that requires a down payment you can afford. If you save 20 percent of the home’s purchase price to use as a down payment, you might qualify for a conventional mortgage without mortgage insurance. A conventional loan comes with a lower interest rate, and you’ll be able to avoid the headache of comparing mortgage insurance rates altogether.
Source: Rismedia

Posted on February 28, 2017 at 7:43 pm
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