MORTGAGES

REAL ESTATE HELP

foreclosure investing
foreclosure options
home insurance
renter's insurance
mortgages
refinancing
home equity loan
second mortgage
mortgage insurance
home equity credit
appraisals
private insurance
fixed vs. adjustable rate
choosing mortgages
reverse mortgage
lock interest rates
closing costs
moving costs
moving insurance
moving terminology
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Home Insurance Advice
  Buying a home is one of the single largest investments that most people ever make. If you need to protect that investment, your main line of defense is homeowners insurance. Most standard homeowners insurance policies will provide coverage for damage to your home (and many of the items in your home) caused by:
Theft  
Fire and Lightning  
Smoke  
Broken Pipes  
Ice and Snow  
  Homeowners insurance also provides coverage for liability claims, medical payments to third parties, and legal costs if a lawsuit is brought against you. The most common amount of liability coverage included in a homeowners policy is $100,000, but you may need much more, depending on your circumstances.
What will not be cover by the insurance?
  Is very important that you read the homeowners insurance policy to find out exactly what is and is not covered. Always do this before you suffer a loss, so you won't be surprised. Most insurance companies exclude damages caused by an act of war, nuclear accident, terrorism, earthquake, and flood, although you may be able to purchase special policies or endorsements that will cover these other events. Most homeowners insurance policies limit coverage for certain high-priced or hard-to-replace items. However, additional endorsements or floaters will be necessary to protect items like expensive jewelry, furs, antiques, and other valuables. You will need to have each item appraised individually.
How much should you pay?
All mortgage lenders require that borrowers get a minimum amount of homeowners insurance (usually equal to the appraised value or the purchase price of the property). But this is not necessary the amount you really need. Instead, do some research and find out how much it would cost to rebuild your property, then consider insuring it for that amount. Are you willing to pay extra by having damaged personal property replaced? If so, consider purchasing replacement cost coverage with your homeowners insurance. When it comes to valuing your property, insurers generally use one of two methods. The first, actual cash value, pays an amount equal to the replacement value of the property, minus depreciation for the years you owned the property. The second, replacement cost, is more expensive, but it pays you the full value of the item today, so that you can replace the old property with a new one.
How deep are your pockets?
To save money, consider choosing a deductible of $250, $500, or even $1,000. In the event of a loss (e.g., water damage from a leaky roof), you'll be required to pay this amount out of your own pocket before your homeowners insurance takes over, but in the meantime, you'll save on premium charges. Don't forget to tell your insurer if you have a home security system (e.g., fire, burglar, emergency). Most insurers offer discounts for such safety features. You may also qualify for a lower insurance premium if you live near a fire department or hydrant, own a newer home, own a home built out of fire-resistant materials, or get your auto insurance from the same company.
Shop around
  Get quotes from several insurance companies when shopping for homeowners insurance. But remember, the lowest price does not always equal the best deal. Compare the coverage each policy offers, and check with your state's department of insurance to make sure that each company you're evaluating has a good reputation in the industry.

How to Get a Second Mortgage on Your Home

For many people, a home is their largest investment - and potential source of capital. Getting a second mortgage, or a home equity loan, can tap that equity for college, home improvements or other pressing financial needs.
 
 
 
Steps:
1.  Determine why you need or want a second mortgage. The level of need will determine how you proceed with your lenders since it will define how much you want to borrow against the appreciated value and built-up equity in your home.
 
2.  Be certain you can afford the additional payments involved in a second mortgage by running some hypothetical calculations through a mortgage calculator.
 
3.  Arrange for an appraisal of the home. (A second mortgage, like a first mortgage, will require an appraisal to determine the home's market value.)
 
4.  Ask your lender about closing costs.
 
5.  Ask if the lender requires private mortgage insurance (P.M.I.) on a second mortgage.
 
6.  Ask your lender to determine if you would be better off to refinance your house rather than to use a second mortgage.
 
 
Tips:
Because a home equity loan will rank as a lower or second loan to your original mortgage, expect to pay a higher interest rate than advertised mortgage rates.
 
A second mortgage is literally a loan on top of your existing mortgage, so it is always advisable to have a solid idea of what your house is worth compared to what you owe on it.
 
You will only have interest and principal payments on a second mortgage - taxes and insurance are only paid once, in your first mortgage.
 
Sometimes the holder of your first mortgage will be more accommodating than another lender on a second mortgage, since you are a known customer.
 
If used wisely, a second mortgage can be used to pay off credit card balances and other high-interest debt.
 
Lenders will sometimes reduce, or even waive, closing costs on a second mortgage. Be sure to ask.
 
If you have been in the home long enough and have built up enough equity, you might be better off to refinance your entire house rather than add a second mortgage.
 
 
Warnings:
It is generally a good idea to avoid lenders that are willing to lend money in excess of your home's value. While it may be enticing to be able to get your hands on that much money, remember that you have to pay it back even if the house is never worth that much.