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Is Your Homeowner’s Policy the Right Fit?

choosing homeowner's insurance

Just like you have to insure your car to get it on the road, you’re also required to take out homeowner’s insurance before a mortgage company will bring your loan to completion.

You may already have been given a stack of pamphlets or a list of websites to look at by now, but take a deep breath before the panic sets in. Choosing homeowner’s insurance, just like choosing any major insurance policy, can look intimidating at face value.

But armed with the right questions, it doesn’t have to be.

10 questions to ask before you pick your homeowner’s insurance

Asking questions early is key. During the house-hunting phase, and before making an offer, is a great time to collect your thoughts.

Create a list of important questions to ask when viewing homes, like:

  • Are the smoke detectors in the correct locations?
  • Has this home recently had a radon test?
  • When was the last time this home had a mold inspection?
  • Have there been any recent termite infestations?

Many of these questions highlight issues a seller will need to address before closing. Crossing possible problems off the list could also slash the price on your homeowner’s insurance.

Once you’ve found a house and are ready to choose your policy, make sure to ask potential insurance agents this:

  1. How much coverage do you provide for my personal items?
  2. Do you offer a discount for protective devices?
  3. Can you offer a discount for non-smokers?
  4. Do you offer a discount for new homes or renovations?
  5. How much will I save each year with a higher deductible?
  6. Is your claims department local?
  7. Will my coverage grow with the value of my home?
  8. If I choose you to insure my home, will you provide a discount on my auto insurance?
  9. In the event of a total loss, will there be enough coverage to replace my belongings and rebuild?
  10. Do I need to add on flood insurance?

Question number 10 is a biggie, according to the National Association of Insurance Commissioners. Most standard homeowner’s insurance typically covers your home from theft, damage, or destruction. It can also protect your liability if you damage someone’s property or if someone is hurt on your property.

A standard policy won’t cover floods or earthquakes, though optional insurance policies are available for both disasters. If you’re in a high-risk area for floods or earthquakes, these policy add-ons are worth the extra money. Disaster assessment before buying could help you select a better insurance policy.

There are eight different levels of coverage. Here’s a quick look at what they protect:

  • HO1: Usually the cheapest policy, covering damage from what’s known as the 11 basic perils (fire/lightning, windstorms/hail, vandalism, malicious mischief, vehicles, aircraft, explosions/riots, glass breakage, smoke, volcanic eruption, personal liability). Most lenders don’t approve of this policy because of its limited coverage.
  • HO2: Expands HO1 coverage, protecting against additional perils like falling objects, freezing, and weight of ice, snow, and sleet.
  • HO3: A popular pick considered “standard” because of its broad coverage and affordable cost. You’ll have protection against all kinds of peril, unless the policy specifically excludes them.
  • HO4: A standard renter’s insurance policy, covering personal liability and belongings. Generally, belongings are protected from the perils listed in an HO2 policy.
  • HO5: Also called a comprehensive form policy, this option covers the most perils. Like an HO3, it’s an open-peril policy: Unless it’s listed in the exclusions, you’re covered. And, it expands the protection of your personal belongings and liability.
  • HO6: Created for condo owners and operating like an HO4 renter’s policy, an HO6 protects personal liability and belongings. This policy also covers the interior structure of the condo, including walls, floors, and ceilings.
  • HO7: Virtually identical to an HO3, an HO7 extends coverage to mobile/manufactured homes, including RVs. This offers protection for structure, liability, and personal belongings.
  • HO8: For older homes, as well as registered historic landmarks, with protection similar to an HO1. It includes a few additions to better protect an older home, plus it reimburses its cash value.

The latest numbers show that the average annual policy may run you around $1,249.

Choosing homeowner’s insurance: How much is your new home worth to you?

Here’s where it comes full-circle — the whole purpose of choosing homeowner’s insurance and picking the right policy for the price is to protect the total cost of your investment. Most lenders require at least one years’ worth of homeowner’s insurance before closing, but it’s smart to take it beyond the bare minimum: Don’t just insure your home for the purchase price.

Insure it for the amount it will take to rebuild and replace it, as mentioned in question number nine.

When thinking of your home’s true value, look deeper than its curb appeal. “Curb appeal” is just that: the initial impression that gets you interested in a property. Smart sellers and their realtors often go to great lengths to make a house as appealing as possible. But whether a home has been lived in for five, 10, or 90 years, normal wear and tear will have occurred.

Building codes and the specific types of materials and methods used in construction may also have changed dramatically since a house was built. Getting a good home inspection prior to closing can uncover what might be hidden from view. (Think faulty pipes, wiring, roofing, and insulation, as well as foundation cracks and termite damage.)

A standard home inspection may cost about $338, providing you with a detailed report filled with useful info. This information might steer you away from a property that could later need costly repairs. Your inspection can also serve as a negotiating tool, resulting in a price reduction.

For a home that gets a reasonably clean bill of health, an inspection report can give a clearer picture of the actual value of a house — and how much it’ll cost to rebuild. A number of insurance companies also require an inspection report to process a homeowner’s insurance application.

Researching insurance companies and home inspectors takes time, with the ultimate goal being to find an insurer and an inspector that you feel comfortable with. So, do your homework. Ask your friends, coworkers, realtor, lender, and the internet for referrals in the area. Hire the professionals who will help you determine the most accurate price.

When choosing homeowner’s insurance, remember to:

  • Shop early. Don’t wait until the last minute as this could delay your loan closing or cause you to rush into the wrong policy. It’s important to have your homeowner’s insurance finalized at least 10 days before closing.
  • Count the cost. The cost to rebuild may be more than your mortgage loan amount, and this is the number you want your homeowner’s insurance to reflect.

To cut costs on your policy, consider increasing your deductible, installing a security system, requesting a discount for bundling policies (auto plus homeowner’s, for example), and creating a plan to pay down your mortgage. Homeowners living mortgage-free may pay a lower premium. Ask your loan officer for details.

If the numbers get confusing, we’re always here to help

Just reach out to your loan officer anytime. Clear up confusion, talk through your options, and walk away with peace of mind.

The HLC Team is Excited to Announce that We are Hosting Another Interactive Contest!

“Where Will You Go Post-Quarantine?” CONTEST

CORNERSTONE HOME LENDING, INC. (“Sponsor”)
OFFICIAL RULES
                              “Where Will You Go Post-Quarantine?” (the “Drawing”)

NO PURCHASE NECESSARY. MAKING A PURCHASE DOES NOT IMPROVE YOUR CHANCE OF WINNING.

ELIGIBILITY: Drawing open only to U.S Residents, 18 years of age or older at the time of entry (“you” or “eligible person”). Void where prohibited. Not open to Sponsor’s employees, officers or directors, or to members of the immediate family or household of any of the foregoing.

DRAWING PERIOD: The Drawing begins on Monday April 12, 2021, at 10:00am PDT and ends on Monday May 26, 2021at 11:59pm PDT (the “Drawing Period”). The Sponsor’s on-site representative, in their sole and absolute discretion, is the official time-keeper for this Drawing.

HOW TO ENTER: There are two ways to enter. To enter the Drawing, an eligible person must do one or more of the following, each of which represents a single entry. Multiple entries are allowed.

  • Post on social media:
  • Post on your Facebook or Instagram story describing what you plan to do or where you plan to go after quarantine and mention us @hlc_team_cornerstone on Instagram or thehlcteam on Facebook;
  • Tag us in your status update on Facebook at thehlcteam or Instagram at @hlc_team_cornerstone, or on LinkedIn at thehlcteam and tell us where/what you plan to go/do after quarantine; or
  • Post a picture on Facebook or Instagram and tag us using the hashtag #postquarantinelifecontest telling us where you plan to go after quarantine; or
  • Send a photo to cara@hlcteam.com and tell us your post quarantine plans.

 

  • Mail-In: You also may enter by neatly hand-printing your complete, name, postal address, daytime telephone number, email address, and the words “Where is your quarantine happy place?” on a piece of paper and mailing it in an envelope with first-class postage affixed to: Where is your quarantine happy place? Mail-In Entry, c/o Cornerstone Home Lending, Inc., 1164 N. Monte Vista Avenue, Suites 3 and 4, Upland, California 91786. Each postal entry must be mailed separately, postmarked by 04/30/21, and received by 05/03/21. No responsibility is assumed for any lost, late, illegible, or postage-due mail.

The eligible person’s entry may not:

  • tag any person other than the social media accounts for HLC Team, @hlc_team_cornerstone on Instagram or thehlcteam on Facebook;
  • violate or infringe another’s rights, including but not limited to privacy, publicity or intellectual property rights, or that constitutes copyright infringement;
  • disparage Cornerstone Home Lending, Inc. or any other person or party affiliated with this Drawing;
  • contain brand names or trademarks other than those owned by Sponsor;
  • contain images or artwork not created by entrant;
  • contain material that is inappropriate, indecent, obscene hateful, tortious, defamatory, slanderous or libelous;
  • contain material that promotes bigotry, racism, hatred or harm against any group or individual or promotes discrimination based on race, gender, religion, nationality, disability, sexual orientation or age; or
  • contain material that is unlawful, in violation of or contrary to the laws or regulations in any state where the post is created.

 

The Drawing is in no way sponsored, endorsed, administered by, or associated with Facebook or Instagram. By participating in the Drawing, you unconditionally accept and agree to comply with and abide by these Official Rules and all decisions of the judges, which shall be final and binding in all respects. All entries must be received by the end of the Drawing Period. Any information submitted by you will be subject to the privacy policy posted at http://www.houseloan.com/PrivacyNotice/CornerstoneHomeLendingInc.html .

WINNER SELECTION AND NOTIFICATION: Three (3) winners of the Drawing will be selected based on the number of entries received on May 10th, 2021 from among all eligible entries received during the Drawing Period. The potential winners will be notified by telephone, mail, Facebook Messenger or Instagram direct message and/or email using the contact information given at the time of entry. No liability is assumed for any winner notification that is lost, intercepted or not received by a potential winner for any reason. If a potential winner does not respond within 10 days after the first notification attempt, or if the prize or prize notification is returned as unclaimed or undeliverable to such potential winner, such potential winner may be disqualified, and an alternate winner may be selected. If a potential winner is found to be ineligible, or if he or she has not complied with these Official Rules or declines a prize for any reason prior to award, such potential winner will be disqualified, and an alternate winner may be selected.

PRIZES/ODDS: Three (3) prizes are available: 1) $500 Visa gift card, 2) $300 Visa gift card, 3) $200 Visa gift card. Visa is not a sponsor of or affiliated in any way with this Drawing. No cash alternative or prize substitutions will be allowed, except in Sponsor’s discretion. A substitute of comparable or greater value may be awarded if prize listed becomes unavailable for any reason. If necessary, allow 4-6 weeks after validation for delivery or arrangement for delivery of prize.

GENERAL PRIZE CONDITIONS: Each potential winner (a) is responsible for all federal, state and/or local taxes, and for any other fees or costs associated with acceptance or use of any prize, and (b) may be required to execute an Affidavit of Eligibility, a Liability Release, a IRS Form W-9 (if applicable), and (where legal) a Publicity Release (collectively, “Prize Claim Documents”).

GENERAL PROVISIONS: Acceptance of a prize constitutes winner’s permission for Sponsor to use winner’s name, photograph, likeness, voice, biographical information, statements and address (city and state) for advertising and/or publicity purposes worldwide and in all forms of media now known or hereafter developed, in perpetuity, without further compensation except where prohibited by law. You agree that the Sponsor (a) shall not be responsible or liable for, and is hereby released from, any and all costs, injuries, losses or damages of any kind, including, without limitation, death and bodily injury, due in whole or in part, directly or indirectly, to participation in the Drawing or any Drawing-related activity, or from acceptance, receipt, possession and/or use or misuse of any prize, and (b) have not made any warranty, representation or guarantee, express or implied, in fact or in law, with respect to any prize, including, without limitation, to such prize’s quality or fitness for a particular purpose.

By entering the Drawing, you further agree that (a) any and all disputes, claims, and causes of action arising out of or in connection with the Drawing, or any prize awarded, shall be resolved individually without resort to any form of class action; (b) any claims, judgments and awards shall be limited to reasonable and actual out-of-pocket costs incurred, including costs associated with entering the Drawing, but in no event attorney’s fees; and (c) under no circumstances will you be permitted to obtain any award for, and you hereby waive all rights to claim, punitive, incidental, indirect or consequential damages and any and all rights to have damages multiplied or otherwise increased and any other damages, other than damages for reasonable and actual out-of-pocket expenses. These rules and any disputes relating hereto are governed by the internal laws of the State of Texas without regard to principles of conflicts of laws, and by entering, you consent to the exclusive jurisdiction of the state and federal courts in Houston, Harris County, Texas for resolution of any disputes relating to the Drawing and waive any objection thereto. Any individual who is found to be tampering with the entry process or the operation of the Drawing, to be acting in violation of these Official Rules, or to be acting in an unsportsmanlike or disruptive manner, or with the intent to disrupt or undermine the legitimate operation of the Drawing, or to annoy, abuse, threaten or harass any other person, may be disqualified, and Sponsor reserves the right to seek damages and other remedies from any such person to the fullest extent permitted by law.

Sponsor reserves the right to modify, extend, suspend, or terminate the Drawing, in whole or in part, if it determines, in its sole discretion, that the Drawing is technically impaired or corrupted or that fraud or technical problems, failures or malfunctions or other unintended circumstances have impaired the integrity, administration, security, proper play and/or feasibility of the Drawing as contemplated herein. If the Drawing is terminated before the designated end date, Sponsor will (if possible) select winner in a random drawing from all eligible, non-suspect entries unaffected by the problem. Inclusion in such drawing shall be each entrant’s sole and exclusive remedy in such circumstances.

Only the type and quantity of prizes described in these Official Rules will be awarded. If, for any reason, more bona fide winners come forward seeking to claim prizes in excess of the number set forth in these Official Rules, the winner of the advertised number of prizes may be selected in a random drawing from among all persons making purportedly valid claims for such prize(s). Inclusion in such drawing shall be each entrant’s sole and exclusive remedy in such circumstances.

WINNER LIST/OFFICIAL RULES: For the name of the prize winner, available after May 26, 2021, send a self-addressed stamped envelope to Cornerstone Home Lending, Inc., HLC Team, 1164 N. Monte Vista Avenue, Suites 3 and 4, Upland, California 91786. All such requests must be received by May 10th 2021. For a copy of these Official Rules, write to Cornerstone Home Lending, Inc. Attn: HLC Team, 1164 N. Monte Vista Avenue, Suites 3 and 4, Upland, California 91786.

SPONSOR: Cornerstone Home Lending, Inc., HLC Team, 1164 N. Monte Vista Avenue, Suites 3 and 4, Upland, California 91786.

Today’s mortgage payment is over $1,600 cheaper [INFOGRAPHIC]

Average rates show that buying now is better

Here are some highlights from the cost-across-time comparison:

  • It’s easy to put today’s low rates — now hovering around 3 percent — in perspective when we take a look back at mortgage rate averages over the past 40 years.
  • Mortgage rates plummeted this past year. Now, they’ve started to rise. By the end of 2021, rates are expected to increase to around 3.6 percent.
  • Your mortgage interest rate has a huge impact on your monthly mortgage payment. With today’s rates, you have the potential to save over $1,600 a month compared to just a few decades ago.*
  • Today’s homebuyers are better off buying sooner rather than later and locking in a low rate while they can.

Rates are great. Why wait? Prequalify now.

It can depend on the amount of the home loan you qualify for, but even a half a percent increase in your interest rate could add hundreds to how much mortgage you’re paying each year.

In the 1970s, the average mortgage rate of 8.86 percent came with an average $1,986 monthly mortgage payment. In the 1980s, the average 12.7 percent rate came with a $2,707 monthly mortgage payment. In the 1990s, homeowners with an average 8.12 percent interest rate paid $1,855 a month in mortgage. And in the early 2000s, this came out to an average $1,546 monthly mortgage payment at a 6.29 percent rate.*

Today’s average 3.13 percent mortgage rate may come with a much more affordable $1,072 monthly payment.* You could pay over $1,600 less each month on your mortgage than you would have paid at peak rates in the 80s. Even with an expected increase in the next 12 months, rates still sit far below historic levels.

These historically low rates may seal the deal if you’re on the fence about buying.

To ensure you’re making the right decision, it can also help to ask two questions:

  1. Is it likely that home values will be higher in a year?
  2. Is also likely that mortgage rates will be higher in a year?

Coming at it from a strictly financial viewpoint, if you answer “yes” to one of the questions above, it’s a strong sign that you should consider buying a home now. If you answer both questions with a “yes,” you could definitely benefit from buying today.

While no one can guarantee what mortgage rates or home values will look like in 12 months, multiple housing authorities appear to be answering a definitive “yes” to both questions. Rates, as mentioned, are predicted to rise. Home values are also projected to keep appreciating.

What does this mean for you as a buyer? Let’s say we stick with the assumptions: that rates will rise to around 3.6 percent this year and that home values will appreciate by nearly 6 percent. Let’s also suppose you’re interested in buying a $250,000 home with a 10 percent down payment.

If you wait until next year to buy a house in this scenario, you could see financial repercussions like:**

  • Paying as much as $15,000 more for your house.
  • Needing an extra $1,500 for your down payment.
  • Paying an additional $133/month for your mortgage payment (adding up to $1,596 more per year).
  • Missing out on a $15,000 wealth increase through growing equity.

Of course, there are many factors to consider when preparing to buy a home. But if you look at it from a purely financial standpoint, buying now is likely to benefit you much more than purchasing next year.

Wait now, pay more later?

Buying at today’s lower rates can give you a lot to be thankful for. You’re getting a better rate than your older siblings did 10 years ago, your parents did 20 years ago, and your grandparents did 40 years ago. Because of this, many homebuyers find themselves facing a golden opportunity. See how much house you can afford before rates rise.

*MBS Highway payment estimate, 2021. Rates listed are for illustrative purposes only.

4 Reasons Why You’re Better off Buying a House this Spring

buy a home now

The housing market this year is unlike any we’ve ever seen. So, if you’re thinking about buying, it’s smart to do a little digging. Use these helpful guidelines to determine if you should start home-shopping now or wait until summer.

4 things every homebuyer needs to know about this spring’s housing market

Maybe you’re a renter who wants to start building something permanent (in the form of home equity that’s been growing at an astonishing rate). Or perhaps you already own a house and are ready to swap out your starter for your family’s forever place.

Even with the economic changes of 2020, market factors show there’s no need to put your dreams on hold. In fact, the latest report from ShowingTime, a supplier of real estate showing management technology, found that winter homebuyers never hibernated, showing instead a 49.5-percent year-over-year traffic increase. Springtime buyer activity is expected to climb even higher.

In a market this hot, there are many advantages to buying now instead of later:

1. Housing prices will keep going up.

Based on CoreLogic’s latest U.S. Home Price Insights report, housing prices have appreciated 10 percent in the last 12 months alone. And, the report projects that home prices will not drop but should continue to increase by more than 3 percent.

Some housing experts say home prices may rise more than that — as much as a 5.7-percent increase. If you’re ready to buy a home, it may cost more to wait.

Click here to connect with a local loan officer who knows the ins and outs of today’s market and can help you close fast.

2. Mortgage rates are currently low.

They’ve hit multiple record lows, with Freddie Mac’s Primary Mortgage Market Survey showing around 3.17 percent as a recent 30-year fixed rate. Income growth may be affected by today’s economic changes, but mortgage rates are still projected to stay low and affordable. Close to half of first-time buyers said that, because of low rates, they were surprised to find they could afford even more than they expected.

Mortgage rates have a direct impact on your monthly payment. That’s why waiting to purchase until later in the year is a gamble: Rates are inching upward, which causes your monthly housing cost to automatically increase.

3. Either way, you’re paying someone’s mortgage.

Some renters may feel uncomfortable with the idea of taking on a mortgage and might put off buying their first house. But unless you happen to be living with a loved one rent-free, you’re going to be putting money toward a mortgage — whether it’s yours or your landlord’s.

As a homeowner, the monthly payment for your mortgage will function like “forced savings.” Each time you pay on your mortgage, your money will help to begin building your home equity with the potential to cash out on it in a few years. Monthly rent, in contrast, contributes to a landlord’s home equity and will most likely help their worth increase.

This may be an ideal time to start putting your monthly housing expense to work for you.

4. You can start your next chapter.

The actual cost of homeownership can be broken down like this: a home’s market value coupled with the current interest rate. As mentioned, home prices still appear to be rising.

What if these factors weren’t on the table? Would you still prefer to wait? This can tell you much more about the reason you want to buy and if it’s worth it to delay. Financial factors matter. But ultimately, you can’t put a price on having a secure place to raise your family; more room for kids, pets, and remote work; total control over how you decide to customize and renovate; and a deeper connection to your community.

The fact that now is an ideal time to buy is icing on the cake.

Signs point to a unique opportunity for this spring’s homebuyers

8 Signs Your Bank Account Could Benefit From a Refinance

refinance mortgage

It’s been a big year. As a result of the pandemic, mortgage rates dropped to new lows 16 times in 2020. Moving into 2021, rates are beginning to rise slightly as vaccines become more available — though they remain within “historically low” territory.

With mortgage rates as low as this, close to 13 million homeowners* still eligible to refinance could see substantial savings.

How to tell if the time is right

Refinance applications shot up 224 percent when rates dropped at the onset of the pandemic. A year later, and millions of homeowners could still take advantage. Black Knight’s recently released Mortgage Monitor Report* found that around 13 million homeowners with a 30-year mortgage may qualify for and benefit from refinancing.

There are a few ways to know if it’s the ideal time to refinance. You may:

  1. Be looking to lower your current interest rate.
  2. Be hoping to lower your monthly mortgage payment.
  3. Have a need for cash, i.e., covering unforeseen expenses or paying for college.
  4. Have improved your credit score.
  5. Need money for home improvements or upgrades.
  6. Need to consolidate your debts.
  7. Want to change your loan terms.
  8. Want to shorten your loan term and pay your mortgage off early.

Shortening a loan term can be a smart choice at a time when mortgage history is being made. Converting from a standard 30-year home loan to a 20- or even 15-year loan term could offer significant savings. This week’s average mortgage rate is around 3.05 percent.

Reduce a loan’s term, and your payment may not necessarily change, but you’ll pay off your mortgage sooner. This may save you upwards of $42,000 in interest.

Otherwise, you could keep your 30-year loan term and refinance to lower your monthly payment. Refinancing a $269,000 median-priced mortgage at roughly 4.5 percent interest to today’s rate of around 3.05 percent (with an estimated 3.23 percent Annual Percentage Rate) may make a monthly payment (estimated at $1,141) about $222 cheaper.** Annual savings could add up to over $2,600.

Tap into an extra $17,000

Refinancing can pay off when rates are low or if your home’s value has recently increased. With low inventory causing home prices to rise, this is likely.

The average home equity has risen an astonishing $17,000 (seen below). This factor alone may make more homeowners eligible to refinance:

refinance mortgage

Home equity is a portion of the total wealth you’ve accumulated as a homeowner. Refinancing is one of the most common ways to leverage this growth in your investment.

Compared to last year, the average equity is 10.8 percent higher. Accounting for the $17,000 in equity gains, the average homeowner with a mortgage may have $194,000 in equity available.

Since today’s rates are still at historic lows, it’s possible that you could refinance to access considerable cash, without changing your monthly payment. This cash can go toward college, renovations, vacations, and other big purchases. In the past year, many homeowners facing hardships have also used their equity to help cover household expenses.

As CoreLogic’s Chief Economist Frank Nothaft explained:

“Strong home price growth has created a record level of home equity for homeowners… This provides an important buffer to protect families if they experience financial difficulties and is one reason for the generational-low in foreclosure rates reported.”

When market mortgage rates are over 1 percent lower than your current mortgage rate — as is the case for millions of today’s homeowners — it’s a good idea to meet with your loan officer.

In fact, keeping the same mortgage rate for the life of a loan isn’t necessarily encouraged. It’s not an industry standard. As a rule of thumb, having a regular mortgage check-in can help ensure a loan’s numbers, and its savings, are still competitive.

If you’re shopping around, it’s always smart to request rate quotes from a minimum of three lenders. Once you get your quote, don’t just look at the rate. Comparing APRs (apples to apples) can give you a clearer picture of how much a mortgage actually costs, including additional expenses. Loan terms and other perks — like a lender that offers you access to the latest remote mortgage technology and has the in-house manpower to expedite your closing — might also influence your final pick.

Cash out or save thousands

Lock in a historically low mortgage rate today, and you’ll automatically lower your monthly payment. Or, you could reduce your loan term to see long-term savings or even cash out to pay for the unexpected. All while keeping your monthly payment the same. Contact your loan officer to learn about your options.

9 Things I Never Thought I’d Have to Do When I Became a Homeowner

buying a new house

What’s it really like to own a new house for the first time? Homes are more affordable than they’ve been in over a decade.* So, there’s a big chance that you or someone you love will be buying a house in the near future — and will be needing this advice.

The 9 totally unexpected tasks every new homeowner might face

We asked again, and homeowners answered. Here’s what first-time and seasoned homeowners on our team had to say.

As a homeowner, you might:

1. Install a new toilet.

Really. Whether it’s an upgrade or a much-needed replacement, a plumber’s price for putting in a new toilet doesn’t run cheap. It’s estimated at up to $260, not including the actual cost of the toilet. Thankfully, installing a new toilet isn’t as hard as you’d think.

“It’s shutting off the water, draining the remaining water, then unscrewing four to five bolts. The rest is essentially just reversing that process.” – Chris

2. Invest in rain gutters.

“Most homes don’t have new rain gutters unless you upgrade them. But rain gutters protect your home from a lot of potential damage: Rainwater can ruin your foundation, splash dirt on your siding, cause your fascia boards to rot, and more.” – Munni

3. Make minor improvements.

Get acquainted with YouTube tutorials: The odds of taking on a few home repairs yourself are high. Replacing light switches and fixtures is fairly straightforward — just remember to cut off the power at the breaker.

“From there, you’ll usually only need to undo three color-coded wires from the old fixture and replace with the new.” – Chris

“Upgrading from those ugly yellow plugs and light switches is easy to do and makes a huge difference. I’ve also fixed over-painted and over-patched drywall: Add coats of mud, wet sand with a sponge, apply PV primer and a can of spray texture, and paint, and it looks like a brand-new wall.” – Austin

If you want to dig deeper, here’s exactly what you can expect from us when you buy.

4. Mount and drill.

Compared to rental living where many landlords may limit or prohibit wall hangings, your walls are now your own to do with as you please. To get everyone settled in, your first move is likely to be mounting your TV.

“Wall-mounted TVs are life. But if you’re going to hide the wires, do it correctly and safely. Your TV’s power cord isn’t rated to be run through a wall, which can be a fire hazard and potentially void your home warranty. Amazon kits allow you to install two outlets with an electrical cord rated for interior walls using a stencil and drywall saw. Just think of it as a wall-rated extension cord no one will see.”

Also: “Be careful where you drill. I was hanging shelves in the nursery. Using my stud finder, I located what I thought was my stud. What it ended up being was a copper pipe running up to the hot water heater in my attic. In hindsight, I was moving too quickly. The pipe was an inch over from the actual stud. Know where your main water shut-off valve is too.” – Matt

5. Reinsulate your attic.

After spending time in isolation, you may be looking for creative ways to convert previously unused space. Insulating a garage or a shed can give you access to another room to use in all seasons. Insulating or reinsulating can also reduce energy consumption, lower heating bills, and even increase your home’s value.

“I’m about to reinsulate my attic with blown-in insulation by myself. I’ll also be insulating my garage walls the same way — I’m turning my garage into a gym/office and adding a mini-split AC.” – Austin

6. Replace your carpets.

This can be a big help for adults and children with allergies — especially in a family with pets. It can also improve aesthetics. Carpets collect allergens, dust mites, and dander. And with daily foot traffic, they’re notoriously hard to clean.

“Our toddler had eczema, asthma, and allergies, and we couldn’t figure out what was triggering them. Seasonal allergies really can’t be helped, but we saw a difference when we removed all the carpet from the kids’ rooms and put in air purifiers.” – Mark & Bethany

7. Upgrade your AC.

Start by installing ceiling fans in every room; not all rooms come with ceiling fans in a new house. This will help with air circulation and keeping the house cool. Don’t forget to reverse the direction of the blades on cold days to circulate the warm air throughout the house.

Then ask: How comfortable and cool do I want to be? “Invest in your AC unit to ensure you have a proper cooling system fit for your home during those hot summers. You don’t want to get caught in the heat with a huge, unplanned expense.” – Fernando

8. Use your home warranty.

It’s there for a reason. But until something breaks or malfunctions, you might not give a second thought to the home warranty you picked — and purchased — when you bought your house.

“My advice would be to look at your home warranty and see what’s covered! I thought all my major appliances were covered, and when my dishwasher broke, I hadn’t paid for the ‘upgraded’ coverage, so it wasn’t included.” – Shelbi

9. Winterize your sprinkler system.

For those who have a sprinkler system: When grass has gone dormant, and you’re no longer watering, it’s time to prep your system for the winter.

Every system is a little different, but generally speaking:

  • Locate your sprinkler valve and turn the handles 45 degrees.
  • Then locate a small hole with what looks like a screw head near it.
  • Using a Phillips screwdriver, turn the head until the bleed valve opens.
  • If you look inside the small hole, you will see it open up.

“This allows excess water to bleed out of the line, preventing water from freezing in your pipes and leaving you to discover a break when you start the system back up in spring.” – Matt

Millions of Remote Workers are Planning to Make a Move

working remote

Have you spent some time working remote this year and last? Odds are, as health officials are still trying to contain the pandemic, you’ve been working at home much longer than you first anticipated. To keep doors open and team members productive and safe, businesses across the U.S. have started to operate mostly remotely.

Move to a new area, get a better house?

This unexpected shift has caused Americans everywhere to rethink what they need — and desire — from their living space, whether it’s a change of location, floor plan, or size. Some remote workers require extra room, especially when kids are learning at home. Others want to downsize.

Whether you rent or own your house, you might be considering a move while mortgage rates are at record lows to better accommodate remote work for the future.

Crunch the numbers and find out if you should rent or buy.

You’re not alone. Upwork’s recent study confirms that:

“Anywhere from 14 to 23 million Americans are planning to move as a result of remote work.”

To paint a clearer picture, 6 million U.S. homes sold last year. Right now, in comparison, about 2 to 4 times the amount of people are thinking about moving, directly connected to their transition to working at home.

Roughly 45 percent of these workers plan to remain within a two-hour driving distance from their current house, Upwork’s study shows. But coming in a close second, 41.5 percent of people preparing to move as a result of working remotely would consider purchasing a home over four hours from their current location.

These numbers are depicted in the graph below:

working remote

This could be because, sometimes, moving farther away from your current area could allow you to get more for less, i.e., buying a larger or more updated home without increasing your housing budget. If you’re able to work from home, you might find many more homes just by broadening your search.

Of the remote workers polled, Upwork also says:

“People are seeking less expensive housing: Altogether, more than half (52.5 percent) are planning to move to a house that is significantly more affordable than their current home.”

Maybe you’d like to do away with your daily commute. Or, perhaps you just want more home office space. Either way, you might be changing your plans. If so, now is an ideal time to connect with a local loan officer to assess your new needs and discuss which low-cost loans are available.

More homebuyers than usual appear to be preparing to purchase, taking advantage of a uniquely affordable housing market at the end of 2020. Real estate is typically slow in the winter, but economists believe that’s unlikely this year. Low housing inventory and high buyer demand triggered by historically low rates are keeping the market booming.

Inventory might be an issue, depending on where you live. But again, there’s that silver lining.

Expanding your home search radius, as millions of remote workers are doing, can uncover hidden gems and give you more options. Once you find a home you love, it’s important to act quickly. Prequalifying for a mortgage now, even before you begin house-hunting, can give you a competitive advantage in a potential bidding war, making your offer more attractive.

Here’s a great reason to break up with your landlord

You can stop paying someone else’s mortgage, for starters. Not only that, you’ll be building your own investment. By paying your own mortgage each month, you’ll automatically begin to grow equity in your house. If your needs have changed because of working remotely, get in touch with a local loan officer and prequalify now.

365 Days Later: Homeowners are Saving Hundreds on their Monthly Mortgage

monthly mortgage payment

Mortgage rates have dropped over a full percentage point within the past year, hitting new lows 16 times. This is a strong driver toward homeownership: Today’s lower rates give consumers even more benefits. Although, they’ve gone up in the past few weeks, rates are still at historic lows.

Let’s take a look at the top three:

  1. Downsize or move up. Low rates open up opportunities to sell and move into a new house, whether it’s bigger and better or smaller and located in a more desirable place. You could put your equity gains (soaring to an impressive average of $17,000) from your current home toward a new down payment — securing more room if you’re working at home or have kids learning remotely.
  2. Purchase your first home. The non-financial and financial benefits of becoming a homeowner are well-documented. But what matters is deciding when the timing is right. This is only for you to determine, but it may help to know that now is an ideal time to purchase if you feel that other factors fall into place. Take a closer look at how much it could cost you to wait.
  3. Refinance. If you’re already a homeowner, it may be helpful to think about refinancing. This can be a smart way to lock in a lower rate, along with a lower monthly payment, and see substantial savings over time. But upfront closing costs may also apply. You can read on to answer the question: Is refinancing right for you?

Are you going to save more money if you trade up, rent, or buy? There’s only one way to decide.

Why 2021 could be a great year for anyone who’s ready to buy

A little over a year ago, mortgage rates were significantly higher, sitting at around 3.93 percent. You, like many people, may have been waiting for market conditions to improve to make your move. Current record-low rates have helped homeownership to become more affordable and attainable than it was just one year before.

This chart depicts how much you might save when buying at today’s (early 2021) rates compared to the amount you could have paid last year, also depending on your home’s purchase price:

monthly mortgage payment

This is a time when you’re likely to get more house for your money and may also pay less each month for your mortgage.

Today’s rates are historically low: See how much you could save

Getting prequalified is the first and most important step to take to find out how much more house you can afford at today’s low rates. It’ll also provide you with your new house-hunting price range. The icing on the cake? It takes just a few minutes. Using our free LoanFly app, you can prequalify from anywhere. Make 2021 your year to buy.

Exactly What to Say When Your Clients Ask these Big Questions

real estate marketing

Even in a normal year, you can expect clients to ask routine questions — and you’ll give them routine answers back. However, last year and the start of this year have been anything but typical, for our country and for real estate.

With so many changes taking place related to the pandemic, the economy, and the political sphere, your clients are going to come to you with some complex questions. As the market professional, it’s your job to respond as well as you can and to provide insights that support your insider opinion.

Addressing today’s biggest questions in your real estate marketing plan also serves another purpose: You can help guide your clients through a competitive market, demonstrating your value and supporting a successful year ahead.

4 smart answers to your clients’ top 4 questions

Prepare yourself — these questions are likely to come up often:

1. Is now a good time to sell?

Okay, you’ve probably been asked this more than a few times already. But with all that’s going on, you know your standard answer won’t cut it.

The short answer: Yes, it’s a prime time to sell.

The long answer: Here are several solid reasons why:

  • Housing inventory remains at record lows, while buyer demand has reached record highs. A prospective home seller is looking at a great opportunity to sell rapidly and at a lucrative price.
  • Low rates may lower a monthly mortgage payment, making now an ideal — and affordable — time to trade up or downsize.
  • In a market this competitive, a seller has an advantage. They may have the upper hand when they negotiate terms, moving dates, repairs, and more.

Partner with a local loan officer who has the tried-and-tested technology to help you and your clients move fast.

2. What happens if I sell my house and can’t find a new home to buy?

It’s another question you’re probably going to hear a lot in 2021, and this is why.

Many homeowners hoping to sell have concerns. If they do sell successfully, will they be able to get into a new home that they love in time for closing?

You can use this question as an invitation to explain your stellar approach to negotiating, along with your availability and dedication to helping your seller find the right house in a short timeframe. And, it may help to point out that though preowned homes may be in short supply, many more new build homes are regularly entering the market.

Closing dates are also up for negotiation. Especially in a market this tight. Partnering with a lender that offers a 100-percent commitment to on-time closings (with the reviews to support this) can ease both you and your seller’s minds.

3. Housing prices have increased. Am I better off waiting to buy?

From what we’ve seen of 2021, affordability is already a trending topic in real estate. Along with this comes much misinformation.

It’s expected that a prospective buyer might see rising home prices as being less affordable. But in actuality, multiple factors influence a home’s affordability — not only its price.

To better communicate this, share visuals with your clients. The graph below is extra-helpful in showing that even as housing prices increase, affordability also climbs.

Add this to your listing presentation, post it on social media, and keep it saved in your phone or tablet to help assure clients when they ask (and they will often):

real estate marketing

4. If there’s a surge of foreclosures, will home values start to decline?

Potential homebuyers and sellers have another major concern this year — that homeowners in forbearance related to the pandemic may foreclose.

This can cause worry for two main reasons:

  • A buyer doesn’t want to purchase a home in a hot market, only to have values plummet.
  • A seller may prefer to put off their plans and wait until the market is stable.

But the truth is, banks are taking continued precautions to prevent a repeat of the happenings from 2008 to 2012 — even more so as the housing market is currently playing a significant role in the recovery of our economy.

Highlight these three points to help ease any concerns:

  • About 30 percent of homeowners in forbearance are staying up-to-date on their mortgage payments.
  • Banks don’t want to create the circumstances of the Great Recession again. Many are willing to provide modification plans for their borrowers this time around, helping homeowners to retain ownership.
  • With the impressive amount of home equity among today’s homeowners, many are opting to sell instead of entering foreclosure.

Though each market is different, it can help to remember that most homeowners make decisions based on what they see in the media. That’s why using visuals, market data, and expert quotes as part of your real estate marketing strategy can help to better break down these hot-button topics for your clients.

You can fill your feeds on social media with marketing materials that help answer these questions before clients ask. An informed homebuyer or seller is one who’s confident. As an agent, you’re there to supply them with the freshest information to showcase your value and earn their trust.

Find a loan officer who cares as much as you do

Should You Buy a Home? Yes, if You Want to Build Wealth this Year and the Next Year and the Next.

i want to buy a house

Each year, Americans decide whether it’s time to renew another lease or take the plunge to officially become a homeowner. This can involve looking at income and savings and then determining what finances allow for. It’s also likely that this equation will factor in monthly housing expenses, tax breaks, and other add-on costs.

With all this in mind, the latest studies still show that it’s cheaper to own a home than to rent in most areas of the U.S.

That’s not all: There’s another financial benefit of homeownership that’s often overlooked — the wealth you’ll grow by owning a home in the form of home equity.

I want to buy a house: How much equity can I expect to gain?

As First American’s Deputy Chief Economist Odeta Kushi recently explained:

“Once you include the equity benefit of price appreciation, owning made more financial sense than renting in 48 out of the 50 top markets, with the only exceptions being San Francisco and San Jose, Calif.”

ATTOM Data Solutions — responsible for one of the top property databases nationwide — also just assessed the average home-price gain for U.S. homeowners who sold their houses.

This is what they found:

i want to buy a house

The sooner you buy, the quicker you can start building your equity. See how LoanFly makes homebuying a breeze.

In the past five years, the typical home equity gain in a sale has risen dramatically. CoreLogic — another curator of property data — recently published their Homeowner Equity Insights Report. It showed that the average homeowner earned $17,000 in equity within the past 12 months alone.

So, what can homeowners anticipate for the future of their equity?

This is what seven major authorities are forecasting for home prices in 2021:

i want to buy a house

According to the National Association of REALTORS® (NAR), the median-priced home in the U.S. sits at $309,800. Should homes appreciate by 5 percent in 2021 — as forecasted — then a homeowner’s wealth will increase by $15,490 this year due to rising equity.

There are a few other strong reasons to consider homeownership today:

  • Mortgage rates have begun to increase but are still sitting around record lows, making it a historically affordable time to buy.
  • You may also be spending more time at home and, thus, requiring more space for remote work and schooling.
  • Along with this may come the need for more outdoor space – which could be limited or shared if you’re renting.

It’s a common argument that renting does away with extra expenses like home repairs and property taxes. But it’s important for prospective renters to know that all these extras that a landlord pays are lumped into your final monthly rent — also padded for profit. Renting doesn’t save you money.

When First American compared the net worth of renters and homeowners based on income, only one category (those earning $127,000 to $192,000) yielded a greater net worth for renters. Homeowners came out on top in all other categories, showing higher wealth gains.

As you weigh whether you should rent or buy this year, make sure to count the cost benefits of increasing home equity. If other financial factors fall into place, this is an ideal time to become a homeowner and see the rapid growth of your investment.

Let’s make mortgage friendly (and fast and easy) again

No more waiting around on paperwork and getting frustrated by unnecessary delays. LoanFly puts you in the driver’s seat — and gives you back control over your mortgage. Use our free app to stay connected with your local loan officer, keep tabs on your loan’s progress, and fast-track your mortgage to closing day.

 

CARMLA 41DBO-95730 ; Licensed by the Department of Financial Protection and Innovation under the CA Residential Mortgage Lending Act

CA Fair Lending Notice

The HLC Team

Branch Phone: 909.920.5260

 Tim Harrison: Producing Branch Manager NMLS# 170960

1164 N. Monte Vista Avenue, Suites 3 and 4 | Upland, California 91786 | CARMLA 41DBO-95730

 

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For educational prusposes only. Please contact a qualified professional for specific guidance. Sources are deemed reliable but not gauaranteed.