Mortgage Insurance–what am I insured against?

If you’re in the process of purchasing a new home, on your bank paperwork, you may have noticed something called “mortgage insurance.” Not sure what it is? There are several different types of insurance that homeowners should be familiar with. Here, I will explain the basics.

Title insurance:
Title insurance from the seller comes from the title company. It protects home owners and lenders from damage or property loss that may happen because of liens or other defects in the title to the property. Each title insurance policy is subject to specific terms, exclusions, and conditions.

Homeowner’s insurance:
Homeowner’s insurance/hazard insurance/fire insurance is a policy issued from an insurance company and it protects your property as well as the contents and possessions inside. It also provides liability coverage against accidents in the home or on the property.  At closing, homeowners will pay for the first year’s policy in full.

Mortgage insurance:
This type of insurance is not a benefit to a homebuyer. When a lender provides a loan and the buyer puts less than 20% down on the purchase, the lender takes a bigger risk. If the buyer ends up defaulting on the loan and they don’t have much “skin” in the game, it’s possible that the lender won’t cover their loan amount when it comes time to liquidate the property. This cost can be paid within your monthly mortgage payment or up front and it will cover the lender’s loss if something were to happen. For some types of loans, particularly FHA loans, the premium will last for the life of the loan, even though your equity position might get you above the 20% mark. Conventional financing will typically have a provision for mortgage insurance that can be removed once the homeowner has 20% equity in the home.

Buying a home requires many different steps and there is a lot of research that is required. The insurance process can be complex and sometimes confusing, especially if you haven’t gone through the home buying process before, and that’s one of the many reasons why it is important to work with a well-qualified, experienced, hands-on Realtor. If you have questions about it, I’m happy to sit down and talk with you about any questions you may have!

Posted on September 5, 2017 at 7:31 pm
Nancy Johns | Category: Home Buying Tips, Selling Your Home | Tagged , , , , , , , , , , , , , , , , , , , ,

Selling your home? Should you price low or high: what’s at risk?

If you’ve determined that now is the right time to sell your home, congratulations!

You are entering into a ‘seller’s market’— this means that there are more buyers in the marketplace than sellers and it’s a great time to sell.  One of the most crucial keys to selling quickly with a maximum return is to establish the RIGHT price. You want to maximize your return but set a price from the start to position your home to sell in a reasonable timeframe and let you get on with your next adventure.

WHAT HAPPENS IF YOU PRICE TOO HIGH?

There are several major risks if you price your home too high.  First, your target buyer may not find your home online or see your property because the price is out of their price range.  In addition, buyers who are shopping in a higher price range will be comparing your home with others and priced too high, you will not compete, actually making the competition look like a better buy.  Homes priced just 10% high reduce the number of buyers by 30%.  The end result is that your home could sit on the market for a longer period of time which means your ownership costs continue and most importantly you can’t “move on.”

HOW CAN WE SELL YOUR HOME AT THE RIGHT PRICE?

Call me! I will do research on what the market conditions are in your neighborhood, taking into consideration your home’s features, age, location, and updates/remodeling you have done.   Then we’ll sit down and talk about your specific goals and needs, then set a price and terms of sale that fit those goals and needs.  We’ll develop a marketing plan specific for your house and price range that targets the right kind of buyers.  During the time you are FOR SALE, I’ll be sure we get input from buyers and their agents to make sure we know how they see our condition and price.  This allows us to make sure we do what we can to make your property more attractive to buyers.  All the while, we will keep aware of things happening in the local market and that might affect how your home sells.

Each home and each client has a unique story.  Whether you’re moving from a condo to a house, moving from acreage to the downtown core, I can work with you in that journey.

Posted on June 26, 2017 at 5:01 pm
Nancy Johns | Category: Selling Your Home | Tagged , , , , , , , , , , , , , , ,