Low Credit Scores - High PMI Rates

If you're in the market for a new home and your credit score is marginal, your private mortgage insurance, or PMI, rate might be hundreds of dollars higher per month than you expect.

Credit scores impact interest rates on all types of loans, but their effects reach far beyond loan rates, resulting in additional expenses that can run into thousands of dollars per year.

The sticker shock of a sky-high PMI payment is bad enough, but some borrowers don't find out that their PMI will add hundreds of dollars to their payments until they are sitting at the closing table.

Find out more about credit scores and PMI rates…

Second Home: Sell or Pass it Down?

To some it's a source of family harmony. To others, however, it's a source of great family division, anger and strife. Yes, it's the old family cottage or vacation property or compound or camp or call it what you will. And now with summer coming to a close, many Americans are trying to figure out what to do with their piece of heaven on earth.

Should they sell the property that has produced fond memories of times spent with loved ones? Or should they give it their children? Or should they do something entirely different?

Families should deal with the issue in four steps.

Home Insurance - Are Your Contents Covered?

Are your house contents insured?  Are you absolutely certain?  If you're under insured, from a legal point of view, you may as well not be insured at all.  Your insurer may simply scale back your claim by the amount you're under-insured, but they would be within their rights to reject the claim totally.

Many people under-estimate the value of their personal possessions.  If you go through your home, room by room, and make a rough mental note of the contents, you may be very surprised at what you come up with.  Don't forget to include portable electrical items, jewelry, designer clothes,paintings and even photograph frames. It's often the smaller items that are easily stolen in a "smash and grab" type of burglary and these can be the very items which you overlook in your valuation.

When working out the premium for your policy, insurers use your postal code, the size of your home and the claims history of the area.  Contents calculators are often available online, which are useful in deciding the level of coverage required.  There are steps you can take to help to cut premiums and stay safe.

In addition to the normal alarm system, you might consider installing motion-activated lights at the entrances to your house.  Not only are they a deterrent for the burglar but they're convenient for your own use too.  A security cover inside a letterbox makes sure a thief can't gain entry by putting a hand or instrument through it to open the door. Fitting all outside doors with efficient key-operated deadbolt locks is a good idea.

Inside the house, valuables could be kept in a safe and security fittings could secure any precious works of art.  It's a good idea to use some kind of marking or security code and record serial numbers, where this is relevant.  Photographs of your valuables are useful too.

There's a wide range of policies available.  With some insurers, it is normal for individual items valued at over $1,500 to be listed separately. These will be covered inside the home, but would need "personal belongings insurance" if they are to be insured away from home.

Some insurers offer discounts on homeowner's insurance if you cover both your home and your automobiles with the same company.  Ask your insurance agent if such discounts are offered in your area.

Just remember, you need to insure the full value of your belongings to avoid the risk of a claim being reduced or rejected, while still getting the very best value for money.  The easy way to do this is via an on-line insurance broker.  They'll be able to search a wide range of insurers and come up with the right policy to suit your own particular needs.

Selling Your House

When you put your house on the market, in order to attract the potential buyers, you spend days cleaning it; painting and even planting flowers in the garden. What sellers tend to forget about is that houses for sale have to be de-personalized so that buyers can easily imagine themselves living there.

The process can be really painful, especially when sellers still live in the house when it is already on the market.

Houses are usually full of memories and filled with things that help us remember. Pictures of children on walls, drawings firmly attached to a fridge or any religious exhibitions need to be taken away or at least put in the place where they would be hard to see. Shelves should be emptied of any travel souvenirs and any toys left by our children on the floor should be taken out of sight.

It can be really hard, especially for somebody who has raised his family there. But a seller needs to understand that once he decides to sell his house, it is not really his home anymore.  We need to provide a lot of free space in our house for our potential buyer so he can easily visualize himself living in it surrounded by things dear to his heart.

Buying a House in a Buyer's Market

Now is a great time to buy a house.  Prices are falling, and so are mortgage rates.  Millions of houses are for sale, and sellers are getting anxious. 

That's one way of looking at it.

Alternatively, you could say:  This is a bad time to buy a house.  Prices might be lower in a few months.  Same with mortgage rates.  With more than 4 million houses on the market nationally, and more being added daily, sellers are bound to become desperate.  Why not wait them out?

In many places, it's a buyer's market in real estate, with sellers outnumbering potential purchasers.  The resulting downward push on prices makes buyers happy.  But it complicates matters for buyers, too.  In some markets, there are too many choices to sort through.  Even more bewildering, buyers wonder if they should wait a few months.

If you're serious about buying a house, this is both the first step and the final goal. To put it more precisely, you have to decide whether you will actively shop and then negotiate a fair deal, or if you'll just passively browse houses, hoping to stumble on a steal.

You're more likely to succeed with the active approach instead of waiting (possibly in vain) for prices to fall further. You can't predict when the local market will hit bottom.  Even if prices do fall, someone could buy your favorite house out from under you.

If you find the right house at the right price, buy it.