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Home Insurance is a requirement, but it’s also a welcome protection for your most prized purchase. When getting insurance, you probably want a good deal on it. Your aim might be to try and save some money. There’s much more to insurance than cost, however. You need to know that whatever policy you choose will cover what you need and provide the right amounts of protection for those items.
There’s so many different parts to an insurance policy that indicate the coverage you can have for your home, it can be dizzying. At its most basic form, home insurance protects your home from risk. This includes fire and robbery. Keep in mind that a less expensive policy will provide less coverage for you. Different types of coverage that you should be aware of are:
- Dwelling Coverage
- Other Structures Coverage
- Personal Property Coverage
- Liability Coverage
These different pieces of a home insurance policy allow for a wide variety of damages things including: Rebuilding your home, coverage that will allow you to rebuild fences, sheds and screen houses, protection if someone is injured on your property, and the insurance of your personal property contained within the home. Some policies will even cover you to live in an alternative place should your home become uninhabitable.
Check Your Deductibles And Policy Limits
A deductible is how much you’ll need to pay before the insurance company picks up the rest of the bill. Policies with higher deductibles are less expensive to purchase. Yet, if your home does face damage, you’ll have to come up with a lot more upfront to have your home repaired. When you’re comparing home insurance policies, you’ll need to make sure that you have the same deductible amount selected for each separate policy that you’re getting a quote on. The deductible amount that you choose should be one that you’d feel comfortable paying when and if something happens to your home.
While shopping by price is a good place to start, you need to compare much more than that. You want to be sure that when you purchase a home insurance policy that you’re actually getting your money’s worth. You need to be mindful of the type of coverage that you get and the amount of deductible that you’ll need to spend in order to get that coverage. It would be tragic for something to happen to your home, only for you to find out that it’s not covered. You pay home insurance for protections, so it’s a great idea to know exactly what you’re paying for and where the safety net is surrounding your home and belongings.
In your search for a home, there’s one option that you may be overlooking. That is the act of sharing a home with others. It can help you to divide the expenses of homeownership and even put you on a faster path to homeownership. When you do decide to share the cost of homeownership with others, there’s a few things that you should know.
There’s so many different advantages to co-buying a home with a relative, even as a married couple. You do need to make sure that the arrangement is well thought out and planned ahead of time.
When you buy a house, you receive what’s called a title. In the case of co-ownership, it explains how the buyers are sharing the title. The way the title is set up could have consequences down the road, especially when it comes to one person exiting the house, and parting ways with the agreement.
When Sharing A Property With A Non-Spouse
When you’re sharing the property with a non-spouse, you have a few options. These include:
Tenant In Common
With this option, there’s no need for a 50/50 split. Buyers are allowed to own unequal interests in the property. If one of the co-owners were to pass away, their ownership would be transferred to one of their beneficiaries. For this reason, tenant in common is the most popular way that buyers who are not related agree in guying a property together and take on the title.
Joint Tenants With Right Of Survivorship
With this option, co-buyers have no option but to own equal interests in the property at hand as a 50/50 split. If you bought a home with two other people, you’d each have one-third interest in the home, and so on. If one tenant passes away, the remaining owners gain the deceased owner’s percentage of interest in the property. There’s no need for a court proceeding or probate, this happens automatically. Even if the deceased owner has a will designating their portion of the property be given to someone else, the request is null and will generally be refused.
Both of these co-ownership options allow for an undivided interest in a property. All owners are co-owners as a part of the entire piece of property. If one owner wants to sell, for example, they would be selling their tenancy or part interest in the property.
Important Things To Do:
- Create a co-ownership agreement
- Clarify who owns what percentage
- Decide who pays the ongoing expenses
- Give options if any owners want out in the future
You could draft one of these agreements with a qualified attorney. It’s a good idea to sit with everyone before the purchase of the property is made to talk and lay out all of the expectations. Everyone should have one of these agreements in writing, however.
While sharing a property purchase can reduce your debt, it’s important to make smart agreements and understand whether the decision makes sense for you and all parties involved.
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You may have heard of an FHA loan, and you probably weren’t sure if you were eligible for one. FHA loans are insured by the Federal Housing Administration which is a part of the United States Department of Housing and Urban Development.
If you have an FHA loan, it includes special mortgage insurance which helps to protect lenders from a loss should the loan be defaulted on.
Why An FHA Loan?
Due to the extra insurance lenders can offer these loans at an lower interest rates. These loans are also easier to qualify for. This makes affordable housing more accessible.
Things To Know About FHA Loans
The minimum credit score depends upon the type of loan that you need.
If you have a credit score of 580 or higher, you can provide a down payment as little as 3.5% with an FHA loan.
If your credit score is lower than 580, you are required to make a down payment of at least 10%.
If your score is lower than 500, you may be ineligible for an FHA loan all together.
FHA loans require a low down payment, which is why it is so enticing to buyers. While these types of loans may have limited availability, it’s good to do your research and see if you’re eligible.
Securing The Down Payment
Generally, buyers use their own savings to make a down payment on a home. Some states have government assistance programs that provide grants to be used for a down payment on a home.
Incentives With FHA Loans
The Federal Housing Administration has special provisions to allow sellers, builders and lenders to pay for some of the other costs incurred while buying a home including the closing costs, appraisal, credit report, or title expenses. This allows builders and sellers to provide incentives to entice buyers. This could have an effect on the interest rates associated with the loan if the lender agrees to pay these costs. Buyers can compare rates with different lenders for these purposes.
Mortgage Insurance And FHA Approved Lenders
The Federal Housing Administration is a provider of insurance and not a lender. You must be sure that you go with an FHA approved lender in order to get your loan in check. This is where it’s important to shop around for benefits, loan standards and rates.
The re are 2 required insurance premiums for FHA loans. The upfront premium is about 1.75% of the loan amount. This is paid at the time the loan is secured and can be financed as part of the loan amount. The second premium is the annual premium which is paid monthly and varies based on factors such as the length of the loan.
As you can see there’s many benefits for home buyers who need additional mortgage insurance and assistance in buying a home. Talk to your lender about how you can secure an FHA loan today and make buying a home a reality.