Tag Archives: home ownership

Does A Home Loan Scare You?

Does a Home Loan Scare You?

Does a Home Loan Scare You?

Well, it doesn’t need to…  I talk to lots of buyers every day that procrastinate when it comes to speaking with a lender about a mortgage.  Some are nervous about their credit scores, but others simply have heard myths like ”pulling your credit lowers your credit score”.  The bottom line is that when it comes to buying a home, information is power and the more you know and understand about your loan process the more confident and worry free you can be when you buy that new wonderful home.

Granted, some lenders are not worth a grain of salt and they arrogantly talk circles around clients instead of taking the time to explain, educate and inform clients about the process.  However, there are also some really great, service friendly lenders who will spend as much time as needed explaining the process and helping a buyer feel more secure with their home purchase.

A great lender will email the client a fees worksheet that clearly outlines various types of loans that the client qualifies for, discloses loan origination fees, down payment requirements and the buyer’s closing costs – basically all monies needed at the closing.  They will also provide information about monthly payment amounts and estimated taxes and insurance amounts.

There are a number of items that the lender needs from the buyer such as a loan application, tax records, W2’s, verification of employment forms, copies of bank accounts – just to name a few.  Our favorite lenders ask for these documents the day of application so they can verify that the buyer fully qualifies for the loan.  This avoids so many pitfalls that can happen in the loan process – especially since the buyer sometimes may have a situation that he doesn’t know will cause problems with the loan – and through analysis of these documents, the lender can confirm the qualification.

Working with a lender before you start looking at homes is the best way to go!  It allows you to know what price range home you want to look for and begins the education process that is so crucial to owning a home.  Give us a call if you want the information for our preferred lenders.  We love them and they take great care of our clients!!

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Home Insurance

This type of insurance, also known as Homeowner Insurance or Hazard Insurance is required by any mortgage company when you purchase a home.  It is designed to protect a private residence and covers various losses including loss to the home (fire, slab leak, hot water heater bursting, etc), contents (theft, etc), loss of use of the home, other personal possessions (tools, lawnmowers, etc), and liability insurance including accidents that may happen at the home or on the property (injuries from trampolines, pools, falls, etc.)

The cost for a home insurance policy is figured based on what it would cost to replace the home, and any additional riders (coverages) that you add to the policy.  Of course, the safer your home is (fire detection equipment, security system, proximity to fire station, police, crime statistics in the area, etc) the more deductions from your rate the insurance company will allow.

Most companies require payment of the policy prior to the year it will cover.  Some companies allow monthly charges to your credit card or bank account for the policy.  If you set up an escrow account with your mortgage company when you purchase the home, the mortgage company will be responsible for paying your insurance policy out of your escrow account once a year for you.

It is important to have an insurance agent that you trust, that is accessible for information and that can provide you with good coverage at a good value.  There are many insurance providers and we always recommend that you shop insurance carriers – making sure to compare apples to apples and that the different quotes include the exact same coverage.

We have recommended the Shane Ferrell Insurance Agency (agentshane.com) to many of our clients (and I use this company personally) with good results.  If you haven’t compared insurance companies in a while, I would recommend setting up an “insurance check up” with your agent and getting quotes from other providers for comparison.

As the Richest People on the Planet say – protecting your assets is one road to wealth…