Buying your first Home

Buying your first home in Kentucky,
Here is a great outline of the steps involved in buying your first home:

"It’s a big decision to make, the jump from renter to homeowner. Being able to own a home comes with many rewards — equity buildup, tax advantages and, of course, having something you can call your very own.

When you’re considering buying, it’s a good idea to pick a real estate agent to help.

“We will offer some insight on how the real estate process works,” said Scott Johnston, president of the Aberdeen, S.D., Board of Realtors.

It’s important to let your real estate agent know exactly what you’re looking for in a property -- whether it’s a two-car garage, a finished basement, an updated kitchen or a big back yard. An agent can also help you make informed decisions about the neighborhood you are considering, the quality of the schools, taxes, traffic volume and more.

Another advantage to obtaining a real estate agent’s service is that he or she has immediate access to homes as soon as they are put on the market.

GET PRE-APPROVED

Before you start looking, get pre-approved by a lender you trust. Getting pre-approved by your lender’s mortgage specialist will help you zero in on a price range. Also, if there are any credit blemishes, they can be addressed at the early stages of the process.

There are several types of mortgages available.

A popular example is a fixed-rate mortgage. In a fixed-rate mortgage, your interest rate stays the same for the term of the mortgage. There are no surprises with a fixed-rate mortgage - a borrower always knows exactly how much his or her mortgage payment will be.

With an adjustable rate mortgage, your rate and payment can change either up or down, as often as once or twice a year. The advantage is that you may be able to afford a more expensive home because your initial interest rate will start out lower.

MONTHLY PAYMENTS

Buyers must also be aware that their payment will not only reflect the principal and interest that was borrowed, but will also include an escrow payment for real state tax, homeowners insurance and PMI. (PMI is a financial guaranty that protects lenders against loss in the event that a borrower defaults. A premium is paid by the borrower and is included in the mortgage payment.)

Depending on the location of your home, you might have to include flood insurance and association dues.

Remember that during the life of the loan, you’ll pay far more in interest than you will in principal. Because of the way loans are structured, in the first years you’ll be paying mostly interest in your monthly payments.

MAKING AN OFFER

If you make an offer on a home and your offer is rejected, don’t feel defeated — keep negotiating. It’s normal for it to be a back-and-forth process. If an appraisal comes in too low, don’t worry — it just offers up another opportunity to negotiate.

EARNEST MONEY

When you make an offer on a home, your real estate broker will put your earnest money into an escrow account.

“It can be as little as $1, but normally it’s $500, $1,000 or $2,000,” said Johnston.

This will be money the buyer needs to come up with when an offer is accepted.

Earnest money is usually applied to the buyer’s down payment or closing costs. If your offer is not accepted, the buyer’s money will be returned to you. But, if the buyer backs out of the deal, earnest money might be lost.

DOWN PAYMENT

The more money you can put into your down payment, the lower your mortgage payments will be. Some types of loans require 10-20 percent of the purchase price. For others it might be less.

“Normally, you can get by with 5 percent down, depending on price range,” Johnston said.

Buyers might be able to obtain their down payment through means other than their own checking or savings account.

Johnston said options could include an employer-sponsored program, or seller concessions (when the seller pays part of the closing costs or down payments). Buyers can also use a relative’s or friend’s “gift” for the down payment.

Ask your real estate agent or mortgage specialist for details.

HOME INSPECTION

If you are considering buying anything other than a newly constructed home, it’s a good idea to get a home inspection.

A home inspection is a visual examination of the physical structure and systems of a home, from the roof to the foundation.

“If I was going to spend thousands of dollars on a home, I’d certainly spend a couple more to make sure of the home’s condition. It will not only show you what you need to be concerned about, it will also give you peace of mind,” Johnston said.

Another way to achieve peace of mind is to purchase a home warranty program for your newly acquired property. Again, not necessary on a newly constructed home, but if you are buying an older home with used appliances, it may be well worth your while.

A home warranty is a service contract, which helps protect homeowners against the cost of unexpected covered repairs or replacement on their major systems and appliances that break down due to normal wear and tear.

“When you buy a home, the last thing you want to do is come up with another $1,500 for a new furnace,” said Johnston.

However, the warranty programs will not cover pre-existing conditions.

CLOSING

When you close on your home, you will sit with a closing agent and most likely your real estate agent. You will sign a stack of papers, you will need to provide proof of homeowner’s insurance, identification, usually a certified or cashier’s check for the down payment or closing costs (closing costs usually include an appraisal, survey, loan origination fees, title work and recording fees).

When you apply for your loan, your lender should give you an estimate of the closing costs, so there won’t be any surprises when you sign on the dotted line. From : Putting your money in your own nest egg:

Call Dick Watts Insurance 502-245-3625 for a free Homeowners Insurance Quote

Buying your first Home

Buying your first home in Kentucky,
Here is a great outline of the steps involved in buying your first home:

"It’s a big decision to make, the jump from renter to homeowner. Being able to own a home comes with many rewards — equity buildup, tax advantages and, of course, having something you can call your very own.

When you’re considering buying, it’s a good idea to pick a real estate agent to help.

“We will offer some insight on how the real estate process works,” said Scott Johnston, president of the Aberdeen, S.D., Board of Realtors.

It’s important to let your real estate agent know exactly what you’re looking for in a property -- whether it’s a two-car garage, a finished basement, an updated kitchen or a big back yard. An agent can also help you make informed decisions about the neighborhood you are considering, the quality of the schools, taxes, traffic volume and more.

Another advantage to obtaining a real estate agent’s service is that he or she has immediate access to homes as soon as they are put on the market.

GET PRE-APPROVED

Before you start looking, get pre-approved by a lender you trust. Getting pre-approved by your lender’s mortgage specialist will help you zero in on a price range. Also, if there are any credit blemishes, they can be addressed at the early stages of the process.

There are several types of mortgages available.

A popular example is a fixed-rate mortgage. In a fixed-rate mortgage, your interest rate stays the same for the term of the mortgage. There are no surprises with a fixed-rate mortgage - a borrower always knows exactly how much his or her mortgage payment will be.

With an adjustable rate mortgage, your rate and payment can change either up or down, as often as once or twice a year. The advantage is that you may be able to afford a more expensive home because your initial interest rate will start out lower.

MONTHLY PAYMENTS

Buyers must also be aware that their payment will not only reflect the principal and interest that was borrowed, but will also include an escrow payment for real state tax, homeowners insurance and PMI. (PMI is a financial guaranty that protects lenders against loss in the event that a borrower defaults. A premium is paid by the borrower and is included in the mortgage payment.)

Depending on the location of your home, you might have to include flood insurance and association dues.

Remember that during the life of the loan, you’ll pay far more in interest than you will in principal. Because of the way loans are structured, in the first years you’ll be paying mostly interest in your monthly payments.

MAKING AN OFFER

If you make an offer on a home and your offer is rejected, don’t feel defeated — keep negotiating. It’s normal for it to be a back-and-forth process. If an appraisal comes in too low, don’t worry — it just offers up another opportunity to negotiate.

EARNEST MONEY

When you make an offer on a home, your real estate broker will put your earnest money into an escrow account.

“It can be as little as $1, but normally it’s $500, $1,000 or $2,000,” said Johnston.

This will be money the buyer needs to come up with when an offer is accepted.

Earnest money is usually applied to the buyer’s down payment or closing costs. If your offer is not accepted, the buyer’s money will be returned to you. But, if the buyer backs out of the deal, earnest money might be lost.

DOWN PAYMENT

The more money you can put into your down payment, the lower your mortgage payments will be. Some types of loans require 10-20 percent of the purchase price. For others it might be less.

“Normally, you can get by with 5 percent down, depending on price range,” Johnston said.

Buyers might be able to obtain their down payment through means other than their own checking or savings account.

Johnston said options could include an employer-sponsored program, or seller concessions (when the seller pays part of the closing costs or down payments). Buyers can also use a relative’s or friend’s “gift” for the down payment.

Ask your real estate agent or mortgage specialist for details.

HOME INSPECTION

If you are considering buying anything other than a newly constructed home, it’s a good idea to get a home inspection.

A home inspection is a visual examination of the physical structure and systems of a home, from the roof to the foundation.

“If I was going to spend thousands of dollars on a home, I’d certainly spend a couple more to make sure of the home’s condition. It will not only show you what you need to be concerned about, it will also give you peace of mind,” Johnston said.

Another way to achieve peace of mind is to purchase a home warranty program for your newly acquired property. Again, not necessary on a newly constructed home, but if you are buying an older home with used appliances, it may be well worth your while.

A home warranty is a service contract, which helps protect homeowners against the cost of unexpected covered repairs or replacement on their major systems and appliances that break down due to normal wear and tear.

“When you buy a home, the last thing you want to do is come up with another $1,500 for a new furnace,” said Johnston.

However, the warranty programs will not cover pre-existing conditions.

CLOSING

When you close on your home, you will sit with a closing agent and most likely your real estate agent. You will sign a stack of papers, you will need to provide proof of homeowner’s insurance, identification, usually a certified or cashier’s check for the down payment or closing costs (closing costs usually include an appraisal, survey, loan origination fees, title work and recording fees).

When you apply for your loan, your lender should give you an estimate of the closing costs, so there won’t be any surprises when you sign on the dotted line. From : Putting your money in your own nest egg:

Call Dick Watts Insurance 502-245-3625 for a free Homeowners Insurance Quote

insurance, dog bite claims cost insurers millions

Homeowners Insurance-Have you been cancelled for dog bite claims?
Insurance companies are now excluding certain types of dogs because of the cost of dog bite claims to the insurance industry. We are now representing companies that are willing to provide homeowners insurance even if you own a pit bull or rottweiller or other breeds. The insurance companies we work with may ask you to sign and "Animal Exclusion" form which states that dog bite claims and subsequent liability will be excluded from the policy.
Disclaimer: Every policy is different consult your own policy for coverage agreements. We are not making any coverage decisions or offers of coverage in this article.

Consider this recent reporty from the homeowners insurance industry:

According to the institute, in 2003 dog bites accounted for about one quarter of all homeowner's insurance liability claims, costing roughly $321.6 million.

In 2002, liability claims accounted for 6 percent of homeowners' claim costs, costing $345.5 million. The average dog bite claim in 2002, the latest data available, cost insurers $16,600.

"For these reasons, insurance companies will look at the breed of dog when deciding in terms of underwriting," Salvatore said. "There is no industry-wide policy. Each company is going to treat dogs differently."

Examples of breeds typically considered high-risk are American bulldogs, American Staffordshire terriers (also sometimes known as pit bulls), chows, Doberman pinschers and German shepherds.

From: Dog could cost you your insurance

Call Dick Watts Insurance 502-245-3625 for a free homeowners insurance quote.

insurance, dog bite claims cost insurers millions

Homeowners Insurance-Have you been cancelled for dog bite claims?
Insurance companies are now excluding certain types of dogs because of the cost of dog bite claims to the insurance industry. We are now representing companies that are willing to provide homeowners insurance even if you own a pit bull or rottweiller or other breeds. The insurance companies we work with may ask you to sign and "Animal Exclusion" form which states that dog bite claims and subsequent liability will be excluded from the policy.
Disclaimer: Every policy is different consult your own policy for coverage agreements. We are not making any coverage decisions or offers of coverage in this article.

Consider this recent reporty from the homeowners insurance industry:

According to the institute, in 2003 dog bites accounted for about one quarter of all homeowner's insurance liability claims, costing roughly $321.6 million.

In 2002, liability claims accounted for 6 percent of homeowners' claim costs, costing $345.5 million. The average dog bite claim in 2002, the latest data available, cost insurers $16,600.

"For these reasons, insurance companies will look at the breed of dog when deciding in terms of underwriting," Salvatore said. "There is no industry-wide policy. Each company is going to treat dogs differently."

Examples of breeds typically considered high-risk are American bulldogs, American Staffordshire terriers (also sometimes known as pit bulls), chows, Doberman pinschers and German shepherds.

From: Dog could cost you your insurance

Call Dick Watts Insurance 502-245-3625 for a free homeowners insurance quote.

How to find an affordable home mortgage

Homes in Kentucky, How to find an affordable home mortgage in Kentucky

How to Cross the Mortgage Minefield
article from Kentucky.com

Decided to buy a house? Now the challenge becomes finding an affordable mortgage.

What's best for you? Conventional? No money down? Adjusted-rate mortgage? Interest only?

In this aggressive mortgage market, the question can be overwhelming. And the dozens of offers likely to clutter your e-mail inbox on a weekly basis probably only add to the confusion.

"The first thing is to understand what you need and what you want -- explore the various options for mortgages with multiple lenders before you go and fall in love with a house," said Doug Duncan, senior vice president and chief economist for the Mortgage Bankers Association.

"You should have looked at your credit report to know it's accurate, you should know what you owe and who you owe it to, and you should know the status of your monthly free cash and savings before you go to the lender.

"The key, then, is to talk to multiple lenders because they serve different parts of the market," Duncan said. "Shopping will always help you ensure that you are getting consistent stories. Then you can negotiate. When I've bought homes, I've always talked to at least three lenders and I've always gotten a better deal."

In today's market, someone with strong credit should look for a mortgage that requires a down payment as low as 3 percent, doesn't have up-front charges and carries an interest rate no higher than 6.5 percent. However, it's likely that interest rates will continue to rise above this week's national average of 6.35 percent.

In March, the Federal Reserve raised rates for the 15th time since the summer of 2004. The federal funds rate -- what banks charge each other for overnight loans -- moved up a quarter point to 4.75 percent.

The federal funds rate is at its highest level in five years, and some economists estimate it will continue a slow uptick that could reach 5.5 percent by the end of the year.

The federal funds rate helps dictate consumer loan rates for mortgages, home equity lines of credit and credit card bills.

When shopping for a mortgage, it's important to take advantage of the Truth-in-Lending Act disclosures; they allow consumers to shop around to compare various lenders' combinations of rates and fees.

Under the law, borrowers are able to weigh competing lenders' full packages of terms in writing before they choose -- factors such as the base interest rate on the loan, the disclosed finance charges and the annual percentage rate.

It's important to know about the many options available to people purchasing a home.

Consider the choices, both traditional and exotic:

• 30-year fixed rate: The monthly payment and interest rate are the same for 30 years.

• 15-year fixed rate: The monthly payment and interest rate are the same for 15 years.

• 5-year balloon mortgage: The monthly payment and interest rate are the same for five years. At the end of the fifth year, the loan is due in full. The borrowers must refinance into a new loan program if they are staying in the home, or pay the loan balance in full.

• Adjustable-rate mortgages: The ARM payment moves up and down as interest rates rise and fall. Lenders give borrowers low rates at the beginning, but the homeowners bear the risk that if rates rise, their payments will climb.

• 2/28 or 3/27 ARMs: A 30-year mortgage in which borrowers start with a low fixed interest rate for two or three years, then the rate adjusts annually for the next 27 or 28 years.

• 3/1-year adjustable rate: The monthly payment and interest rate are the same for three years. Beginning in the fourth year, the monthly payment and interest rate might change every year for the rest of the loan period.

• Interest only: Borrowers pay interest but no principal in the beginning years of the loan; that keeps monthly mortgage payments low.

• Miss-a-payment: Borrowers are allowed to skip up to two mortgage payments a year and up to 10 payments over the life of the loan without affecting their credit rating.

• Piggyback: The loan combines a traditional first mortgage and a home-equity loan or line of credit to avoid private mortgage insurance.

• Payment option: Borrowers have four payment options each month.

There are some good tips about home mortgages in this article

How to find an affordable home mortgage

Homes in Kentucky, How to find an affordable home mortgage in Kentucky

How to Cross the Mortgage Minefield
article from Kentucky.com

Decided to buy a house? Now the challenge becomes finding an affordable mortgage.

What's best for you? Conventional? No money down? Adjusted-rate mortgage? Interest only?

In this aggressive mortgage market, the question can be overwhelming. And the dozens of offers likely to clutter your e-mail inbox on a weekly basis probably only add to the confusion.

"The first thing is to understand what you need and what you want -- explore the various options for mortgages with multiple lenders before you go and fall in love with a house," said Doug Duncan, senior vice president and chief economist for the Mortgage Bankers Association.

"You should have looked at your credit report to know it's accurate, you should know what you owe and who you owe it to, and you should know the status of your monthly free cash and savings before you go to the lender.

"The key, then, is to talk to multiple lenders because they serve different parts of the market," Duncan said. "Shopping will always help you ensure that you are getting consistent stories. Then you can negotiate. When I've bought homes, I've always talked to at least three lenders and I've always gotten a better deal."

In today's market, someone with strong credit should look for a mortgage that requires a down payment as low as 3 percent, doesn't have up-front charges and carries an interest rate no higher than 6.5 percent. However, it's likely that interest rates will continue to rise above this week's national average of 6.35 percent.

In March, the Federal Reserve raised rates for the 15th time since the summer of 2004. The federal funds rate -- what banks charge each other for overnight loans -- moved up a quarter point to 4.75 percent.

The federal funds rate is at its highest level in five years, and some economists estimate it will continue a slow uptick that could reach 5.5 percent by the end of the year.

The federal funds rate helps dictate consumer loan rates for mortgages, home equity lines of credit and credit card bills.

When shopping for a mortgage, it's important to take advantage of the Truth-in-Lending Act disclosures; they allow consumers to shop around to compare various lenders' combinations of rates and fees.

Under the law, borrowers are able to weigh competing lenders' full packages of terms in writing before they choose -- factors such as the base interest rate on the loan, the disclosed finance charges and the annual percentage rate.

It's important to know about the many options available to people purchasing a home.

Consider the choices, both traditional and exotic:

• 30-year fixed rate: The monthly payment and interest rate are the same for 30 years.

• 15-year fixed rate: The monthly payment and interest rate are the same for 15 years.

• 5-year balloon mortgage: The monthly payment and interest rate are the same for five years. At the end of the fifth year, the loan is due in full. The borrowers must refinance into a new loan program if they are staying in the home, or pay the loan balance in full.

• Adjustable-rate mortgages: The ARM payment moves up and down as interest rates rise and fall. Lenders give borrowers low rates at the beginning, but the homeowners bear the risk that if rates rise, their payments will climb.

• 2/28 or 3/27 ARMs: A 30-year mortgage in which borrowers start with a low fixed interest rate for two or three years, then the rate adjusts annually for the next 27 or 28 years.

• 3/1-year adjustable rate: The monthly payment and interest rate are the same for three years. Beginning in the fourth year, the monthly payment and interest rate might change every year for the rest of the loan period.

• Interest only: Borrowers pay interest but no principal in the beginning years of the loan; that keeps monthly mortgage payments low.

• Miss-a-payment: Borrowers are allowed to skip up to two mortgage payments a year and up to 10 payments over the life of the loan without affecting their credit rating.

• Piggyback: The loan combines a traditional first mortgage and a home-equity loan or line of credit to avoid private mortgage insurance.

• Payment option: Borrowers have four payment options each month.

There are some good tips about home mortgages in this article

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