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Saving Money on Homeowners Insurance | Cross River Real Estate
Mortgage lenders require borrowers to carry homeowners insurance not because they are concerned about your home. They make you pay to protect the asset that guarantees your mortgage.
Homeowners insurance protects a homeowner against loss from fire and other hazards that may impair the value of their home. An estimate for the cost of homeowners insurance appears on the lender’s Good Faith Estimate when a borrower is approved for financing and the actual amount is shown on the HUD1, which is the closing document that lists all settlement costs.
However, homeowners don’t have to accept the insurance proposed by a lender and they’re well advised to shop around, because better deals often are available.
In an given state, there might be 100 companies writing homeowners insurance in Michigan are competing against the other companies to provide the lowest possible rates, broadest coverage, and best possible service. Competition works best, however, when homeowners take the time to shop for the rates and coverage that are best for them. Online sites like www.shophomeinsurance.net/home-insurance-quotes.html make it easy to compare coverage and rates.
Shopping for insurance is not as hard as it seems. There are two basic questions to ask any agent or company representative: what losses does your policy cover, and what losses are not covered by the policy? In addition to these questions, you should ask what additional coverage you might need given your situation. Most companies provide a number of additional coverages, often called “riders” or “endorsements”. Examples of additional coverage include such things as jewelry, furs, firearms, and backup of sewers and drains.
Most states allow companies to provide discounts on the cost of coverage. Most people will be eligible for one or more discounts with a company. Although agents and company representatives generally will tell you the discounts for which you are eligible, be certain to ask about them. They can save you money.
You should also ask about group discounts that might be available. Membership in some associations or groups might qualify you for a discounted group policy. You can also save money by insuring your car and your home with the same company
You could b eligible for a wide variety of coverages. Be certain to ask for the coverage that meets your specific needs. When you are deciding which type of policy suits your needs, consider what your house is worth, how much it would cost to replace it, and how much you can afford to spend for insurance.
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First-time Buyers to Pay for FHA’s Financial Crisis | Cross River Realtor
Facing a financial crisis, FHA is asking first-time buyers to pay for the sins of borrowers who came before them. Increases in FHA mortgage insurance premiums and new, tougher underwriting standards that take effect April 1 will cost new borrowers significantly more than refinancing borrowers who have had an FHA loan four years or longer.
On April 1, FHA ill raise the annual mortgage insurance premium paid by borrowers on most new FHA loans by 10 basis points, or 0.1 percent, which the agency expects will add $13 a month to the average borrower’s monthly payments. FHA will also increase premiums on jumbo mortgages (those $625,500 or bigger) by 5 basis points or 0.05 percent, to 155 basis points — the maximum currently allowed by law. Certain streamline refinance transactions will be excluded from the premium increases, the agency said.
The agency is saddled with as much as $16.3 billion in debt due to defaults on loans it insured as the housing market crashed and is facing the grim possibility of asking Congress for a bail out in the midst of the rancorous debate over the budget deficit.
US housing starts dip but remain at solid pace | Cross River Real Estate
WASHINGTON (AP) — U.S. homebuilders began work at a slower pace in January than in December. But all of the drop occurred in the volatile area of apartment construction, which sank 24 percent. By contrast, the rate of single-family homebuilding rose 0.8 percent.
Even with the overall decline, the pace of home construction in January was the third-highest since 2008 and was evidence of continued strengthening in residential real estate.
And in an encouraging sign for the rest of the year, applications for building permits, a signal of future construction, topped December’s rate. Applications for permits are at their highest point since mid-2008.
The Commerce Department said Wednesday that builders started work at a seasonally adjusted annual rate of 890,000 homes last month. That was down 8.5 percent from December, when housing starts had hit an annual rate of 973,000, the most since June 2008.
Analysts had expected a decline on January construction, given the sharp gain in December. December had initially been reported at an annual rate of 920,000. On Wednesday, the department revised up the December pace to 973,000.
January’s was only the second drop in construction in the past six months. It still left the annual pace of homebuilding 23.6 percent higher than a year ago.
Economists noted that building permits keep increasing. Dan Greenhaus, chief global strategist for BTIG, said the increase in permits suggested that the January decline in construction starts would be temporary and that “as the year progresses, housing starts will continue to push higher.”
Greenhaus said he wouldn’t be surprised if construction starts topped 1 million for 2013.
The U.S. housing market is slowly regaining its health after stagnating for roughly five years after the housing boom collapsed. Steady job gains and near-record-low mortgage rates have encouraged more people to buy.
A steady rise in prices reflects, in part, fewer homes for sale. The supply of previously occupied homes for sale has reached its lowest level in more than a decade. And the pace of foreclosures, while still rising in some states, has slowed sharply on a national basis. That means fewer low-priced foreclosed homes are being dumped on the market.
Those trends, and the likelihood of further price gains, have led builders to step up construction. Last year, builders broke ground on the most homes in four years.
For all of 2012, builders started work on 780,000 homes. That was still only about half the annual number consistent with healthy markets. But it represents a 28 percent jump from 2011. And it was the most housing starts since 2008, when construction was still falling after the housing bubble burst more than six years ago.
Sales of new homes jumped nearly 20 percent last year to 367,000, the most since 2009. Still, many economists don’t foresee a full housing recovery before 2015 at the earliest.
The National Association of Home Builders said Tuesday that confidence among U.S. homebuilders slipped in February from a 6 1/2-year high in January. Many builders reported less traffic by prospective customers before the critical spring home-buying season begins.
The home builders’ sentiment index dipped to 46 in February from 47 in January. It was the first monthly decline in the index since last April.
Readings below 50 suggest negative sentiment about the housing market. The last time the index was at 50 or higher was in April 2006, when it was 51. It began trending higher in October 2011, when it was 17.
Many builders are facing higher costs for building materials and having trouble obtaining financing for construction. Some also are facing a shortage of workers in markets where residential construction has picked up sharply, such as Texas and Arizona.
Though new homes represent only a fraction of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to statistics from the home builders.
By region, January’s decline in home construction was led by a 50 percent drop in the Midwest and a 35.3 percent decline in the Northeast. Analysts saw both declines as likely weather related. Construction rose 16.7 percent in the West and 4.1 percent in the South.
via businessweek.com
20 YouTube Tech Channels To Subscribe | Cross River Realtor
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Watch out for that light at the end of the tunnel | Cross River Real Estate
Perhaps the U.S. and global economies are turning the long-expected corner, but that turn is still in forecasts, not current data.
The gold market suddenly believes the greatest economic danger is past, crashing 30 bucks today. Yet, the NFIB survey of small business is stumbling along in recession.
The 10-year T-note continued to creep its way upward, at 2.03 percent this week, the highest in 10 months. Hardly a rocket ride, but disquieting.
Two other explanations for market movements: (1) what we have here is just another false-recovery party or (2) — queasiest of all — the Fed is losing its ability to hold down long-term rates.
via inman.com
Restarting Mortgage Finance: Step 1 | Cross River NY Real Estate
Recently the Consumer Financial Protection Bureau (CFPB) released a much anticipated rule that finally gets the ball rolling on reform of the mortgage finance industry. Investors fled the market following the housing bust, reducing the flow of financing to borrowers. Likewise, many homebuyers were sold mortgage products that were untenable, resulting in damaged credit and lost savings. Transparency, verification and documentation are keys to restoring confidence from investors and homebuyers. The majority of the market will benefit from the new QM rule, but a subset of the market will likely face higher prices or lose access to financing all together.
The Qualified Mortgage rule, or QM, lays out basic requirements for lender underwriting. In short, the originator of the loan must verify all sources of income and assets and verify that the borrower has the ability to repay the mortgage (ATR). A number of loan types are prohibited from receiving the QM statu,s including those with negative amortization (balloon payments), interest-only features, as well as those with durations greater than 30-years. Finally, there is a cap on fees that lenders can charge of 3% (with an exception for loans under $100,000) and the back-end debt to income ratio (DTI) must be less than or equal to 43%.
Mortgages that qualify as a QM will be further bisected by those that have a rate 1.5% above the prime borrowing rate and those that do not. Loans below the 1.5% will receive special legal status known as a safe harbor, where the borrower in default must first prove that their loan was not affordable when originated in order to sue the lender. If the loan is QM and above the 1.5% rate threshold, then there is a rebuttable presumption where the lender must prove that the borrower had the ability to repay. Under the rebuttable presumption, even if the lender can prove the loan met the ATR, the lender incurs legal costs making the case of $70,000 to $110,000 [1] according to some industry analysts, while others analysts argue that the incidence of claims would be extremely low [2]. However, if the lender cannot demonstrate that the borrower had the ability to repay, then the lender faces new enhanced legal fees. Furthermore, the borrower’s ability to fight the foreclosure applies for the life of the loan, which would extend foreclosure timelines, increasing costs to banks. Lending outside of either definition of a QM may be sparse as the lender would have to raise rates further to compensate for litigation risk since these would fall outside either definition of a QM loan; these higher rates might then reach HOEPA limits.
Demystifying the ‘Obamacare’ real estate tax | Cross River Real Estate
Q: When does the tax for “Obamacare” when selling a house go into effect? How will it be calculated? –P.
A: First things first: Always, when considering any real estate move, from buying to selling, refinancing or even planning to rent for a number of years, get your own tax professional on the horn, loop them into your plans, and get their advice.
I say this upfront because I commonly see people worry and fret about tax issues that are not likely to ever be an issue for them, and vice versa: people wandering right into tax dramas they could have avoided if they’d gotten professional advice upfront.
And this “Obamacare” home sale tax issue is no different. Many who are worried about it needn’t be at all. Many who are unaware of the tax should be mindful of it.
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Helen Mirren’s LA Garden Estate for Rent | Cross River NY Homes
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