Do You Need More Home Insurance If Your Value Recently Increased

insuranceDean Graziosi states that it has become more common for homeowners to track the value of their home.  This can partly be attributed to the recent housing crisis, in which many homeowners saw the value of their home decrease dramatically.  With this extra knowledge, many homeowners are curious as to whether they should increase their home insurance as their values increase.  If you are one of the homeowners who are wondering the same thing, I thought you would benefit from my experience.

To help you understand how real estate prices and home insurance values relate, I thought it would be a good idea to explain each one.  Real estate prices are primarily established by the demand in that particular market.  The higher the demand is for a home, the higher the price a seller can ask.  The price of the home also depends on a number of other factors, such as, location.  In the real estate market, location is probably the most important factor that goes into deciding the price of a home.  If you are selling a home in an up and coming neighborhood, this popularity can affect the price of a home in that area.  If a home is located in a great school district, this can also be a factor for buyers who have young children.  But just as with all fads, popularity and the demand for homes in a particular area can decrease.  When this happens, the value of homes in that area can decrease dramatically.

When it comes to purchasing home insurance, homeowners typically base the amount of coverage they purchase not on what was paid for the home, but by purchasing sufficient dwelling coverage.  This will allow you to rebuild your home in the case that it experiences damage from fire or other natural disasters that are covered by the policy.  Insurance agents decide on this amount by taking certain information into account.  Some of the factors that are used are known as replacement value of your home.  This includes the size of the house and what it would cost in your area to rebuild the home.

Insurance companies will also take into consideration how big of a risk is presented by the home and the homeowner.  Once again, location is an important factor in deciding the insurance coverage you should purchase on your home.  The area in which your home is located can determine the most common types of threats that your home is vulnerable to.  If your home is located near a forest or a tornado prone area, you will likely end up paying more for insurance than in other areas.

The best way to determine if you should purchase additional home insurance is whether there has been a change in the replacement value of your home.  This can be determined by finding out if there has been an increase in building costs in your area; and if you have made any recent renovations to your home, states Dean Graziosi.  If either of these factors relate to your home, you should consider purchasing additional home coverage.

What You Need to Know After Buying A Historic Home

historicSo you’ve just purchased your new dream home complete with all the features you’ve always wanted, but it’s in a historic district and has come with its share of problems. Making repairs on a historic property will differ because of rules and regulations you will be required to follow. Below Dean Graziosi has included some information that will help you take your first steps toward making those repairs and restoring your new home to its natural beauty.

Most interior changes won’t be affected by the historical status of your home. You may be required, however, to keep it up regularly. All you will probably need are typical building permits to renovate the inside of your home. Exterior changes, however, require planning approvals. You should consult with your local planner early on in the buying process to find out all you’ll need to know for your area. Check back often during the projects you are undertaking to make sure all details are receiving attention.

Adding onto the property if it is considered a local landmark is another project entirely. Here, you will need to get permission from the Historic Preservation Commission. Small changes such as ordinary repairs and maintenance won’t need to go through this commission. Here, the planning staff will probably be able to help you with the details. Also, different areas may have varying requirements, so it is important to familiarize yourself with your particular location.

When buying the property, you’ll know whether or not it will need work and how much. Consider the cost of this work plus that of securing any permits you will need to take care of it. Owning a historic home can be a dream come true, but if you have to then turn around and put a whole lot of money into it, the dream can turn into a nightmare.

Plan your projects well. Get all the information you’ll need before making the plans. That way you won’t be surprised to find out you should have secured something you were unaware of and you’ll stay within the zoning guidelines. If you are on a tight budget, take care of each project separately. That way you can pour a lot of time and energy into them all individually. Budgeting for all your projects will also help you keep up with expenses as you go along. An article posted on sf.curbed.com points out you can actually save money by purchasing a historic home.

Owning and restoring a historical house can be very satisfying. If your dream is to purchase an older home, one in the historic district might be the perfect choice. It may come with more headaches, but will all be worth it in the end. You can learn more about this and other real estate topics by visiting Dean Graziosi’s website.

FHA Loans and Interest Rate Lock-Ins

FHA loansWhen applying for an FHA loan, you will begin by filling out an application as with any other type of loan. You will work with the lender to obtain approval of the loan, and once this has occurred, you can then move forward with securing it. The tricky part can be agreeing on an interest rate that you, the borrower will pay throughout the duration of your new loan. Dean Graziosi provides some useful information about this process below.

When you and the lender agree on an interest rate, this is what is known as a lock-in. Both you and the lender are committing to this rate and will enter into an agreement. Negotiating the interest rate is a standard part of obtaining an FHA loan. There are, however, some important rules to consider.

As an article posted on FHA.com notes, “Under all currently active FHA single family mortgage insurance programs, the borrower and the lender negotiate the interest rate and any discount points.” Once you and the lender agree on an interest rate and it is locked in, other FHA rules apply. These rules state that the lender may charge a commitment fee that will guarantee the interest rate and any discount points for a specified period of time. This commitment is in writing. The extent to which the interest rate or discount points can change may also be limited.

FHA loans can work much differently from conventional loans, so it is important to thoroughly understand what you are taking on before deciding this is the best option for you. Locking in an interest rate is very important because you will always know how much interest you are required to pay each month, but you should be aware of any additional expenses you may incur along the way.

So, how long do you have from the time of the agreement to the lock-in actually taking effect? According to FHA.gov, the minimum time for lock-ins is 15 days. It may be possible for the loan to close in less than 15 days at the borrower’s convenience, and the lender still may be able to earn the lock-in fees. Lenders are required to honor all relevant commitments.

What happens if the interest rate needs to be re-negotiated? Can you and the lender come to an agreement for a rate that is different from the previously agreed upon lock-in rate? Here the borrower is required to provide you with a HUD interest rate disclosure statement that will explain the terms of the loan are, in fact, negotiable. If there is an increase in either the interest rate itself or discount points, the lender will need to re-qualify you. This rule may require you to re-submit to a credit check, a debt-to-income ratio calculation, or other re-qualification data the financial institution requires.

Before locking in an interest rate, know what fees you may be required to pay and make sure the funds are there to do so. An FHA loan may be the best option for you, and the more prepared you are, the better off you’ll be in the long run. You can find more real estate topics at Dean Graziosi’s blog.

Home Selling Tips For Spring

sellingAs many home sellers know, spring is the hot season for selling their home, states Dean Graziosi.  The arrival of spring signals the start of the home buying season.  To help your home stand out from all of the others being listed during this time, I have put together some tips that will help make your home more appealing to buyers.

  • Curb Appeal – This is the first impression that your home makes on potential buyers, which is why it is so important for sellers.  Presenting buyers with a clear and eye-catching entry way helps develop a positive first impression in their minds.  Adding some potted flowers will help give your home a pop of color that will be sure to catch the eye of any buyer.
  • Home Improvements – Many sellers are reluctant to put any extra money into a home that they will soon be selling.  But simply making a few small home improvements can go a long way in helping your home stand out from the competition.  I’m not saying that sellers should invest a large sum of money in a large renovation, rather spend a small amount and make some small updates throughout the home.  This can be accomplished by replacing the fixtures in the kitchen and bathroom, applying a fresh coat of paint to some of the rooms, and any other small projects that may have gone undone while you were living in the home.
  • Staging – If you feel that you may need help making your home more appealing to buyers, you may want to consider hiring a professional staging company.  They will come into your home and add furniture or accessories that will help bring out the beauty of your home.  You do not have to have your entire home staged, you can choose to only have the main rooms done.  This will be enough to help your home be remembered and stand out.
  • Remove Clutter – This may be surprising, but many homeowners ignore this important step.  If your home is too cluttered it may appear sloppy and uncomfortable to potential buyers.  Dean Graziosi recommends that you spend a few hours and go through each room removing what it not essential to your daily life.  These items can then be placed in boxes and stored until you move.  Special attention should be paid to countertops and family spaces, these are the most common areas where clutter seems to accumulate.

During the listing process, you should share any new renovations that have been done and special features that your home may have with your agent.  They can then use this information to create a print and online description of your home that will capture the attention of potential buyers.  These simple steps will help you make your home more appealing and hopefully sell much faster than other home listed in your area.

How a Seller Can Get Multiple Offers on Their Home

sellerIf you’re a seller who has been waiting for the ideal time list your home, Dean Graziosi states that this may be the time.  With many markets experiencing a great deal of improvement, selling a home has just gotten a lot easier.  Sales are picking up and buyers are feeling more secure about purchasing a home.  But does this mean that there will be bidding wars on every home that is listed?  Probably not, but there are some things you can do as a seller to get multiple offers on your home.

One of the most important factors that can lead to multiple offers is if your home is in a desirable location.  This is the most common factor among homes that receive multiple offers.  Location is often the driving force behind many home buyers’ decision on whether or not to submit an offer.  If your home is located on a busy street, or the school district is not so great, you may not receive multiple offers on your home.  In this case, it is important that you work with your listing agent to determine the best price for your home.

In order for your home to become popular among buyers, it is important that it is priced right.  Buyers are always looking for the best value they can get, which means if your home is overpriced; it likely won’t see much traffic from interested buyers.  While there is no exact science when it comes to pricing a home, an experienced real estate agent will know the best price to list at to drive buyers to your door.  When you price your home at the bottom of the price range for your neighborhood, you will likely attract buyers and receive multiple offers on your home.

To make your home more appealing to buyers, it is important that you do everything you can to ensure that it shows well.  This includes giving your home a fresh coat of paint, make any cosmetic repairs, have the carpets professionally cleaned, and make the home as inviting as possible.  If you feel that after all of your efforts your home is still missing something, you can always bring in a professional staging company.  They have years of experience in making homes as appealing to buyers as possible, states Dean Graziosi.  Ask your agent if they have any recommendations, you do not need to have your entire home staged, just the main rooms that the buyer will see first.  This can go a long way in ensuring your home receives multiple offers.

Many homebuyers view homes online before they ever visit in person.  To ensure that your home looks as appealing as possible, you may want to consider having professional photos taken.  These types of photos are more appealing to buyers who view homes online.  The first impression your home makes on a buyer can be the difference between receiving an offer or going unnoticed.