Getting Familiar with your Homeowners Insurance

Understanding your Home Owners Insurance Policy

There is no doubt that an insurance policy on a home can be tough to understand. However, going over the policy and making sure you are comfortable with the important parts can payoff down the road. Here is an overview to make sure you have the basics covered.

The Home

It is important to know that in the event you lose your home to some sort of accident or force of nature that the insurance plan will provide enough funds to rebuild the home. This goes beyond the selling price of the home when you bought it. You need to know that the home can be replaced at today's costs. Construction costs and materials tend to rise over time. It is important to have replacement cost as part of your insurance policy.

Replacement of Belongings

Besides the actual structure of the home you should also consider your belongings. This can really mean anything such as furniture, dishes, picture frames, electronics, clothes, jewelry and a host of other items.

Try to stay away from the “current market” clause. This means that your 5 year old couch would be replaced at a price that assumed 5 years of use. The same concept would apply to any item that you have owned for a considerable amount of time. Also, ask the insurance company about their process for allowing you to replace items. For instance, if your home burned down and you are staying in a small apartment, do you really want to replace your giant screen TV right now? If the insurance company only gives you 60 days to replace an item, where will you store the products? Does the company demand that you buy an item, provide a receipt and then get reimbursed? All of these items should be covered prior to getting a policy.

Deductible

The deductible for a home insurance policy works in the same manner as an automobile insurance plan. Higher deductibles will result in a lower monthly premium. However, a high deductible assumes that you have the funds to pay the amount in the event of an emergency. A smart financial move would be to save up a good amount, such as $2000, and then change your plan to a deductible of $2,000.

Liability

It is always a good idea to have a strong liability plan in place. For instance, if you have guests for a backyard barbecue and someone falls at the party, your liability policy should cover the expenses for the fall. This could be the cost for the ambulance, any stay at the hospital and possible rehabilitative therapy that is necessary after the injury.

Day to Day Expenses

Some insurance companies will reimburse you for your expenses while you are awaiting for your home to be rebuilt. Make sure you understand the circumstances surrounding this type of expense and how the insurance company will reimburse you.

A lot of the terminology used in the insurance plan is unique to the insurance world and may take a conversation with an agent to understand it properly. Understanding the policy before purchase will help you to feel confident that you are covered in the event of a major crisis.

Understanding Home Owners Insurance 

WHEDA Home Loan Mortgage Rates at Historic Low

I receive daily updates on current mortgage rates in the Janesville Wisconsin area. One of those rates is for the WHEDA Home Loan. Todays mortgage rate showed a new historic low at 4.75%. These rates of course can and do change often so you will want to check with your bank to get the most up to the minute information. To give you an idea of how low this mortgage rate really is, consider this scenario. If you were to purchase a Janesville WI foreclosure property for $75,000 at a 4.75% mortgage rate, your mortgage payment with interest would be only $391. Say you purchased a Janesville WI short sale at $150,000 your monthly mortgage payment would be a reasonable $782. This is assuming no down payment.

If you are looking to purchase a bank owned/foreclosure/REO property, short sale or standard listing in Janesville WI, I would be happy to help assist you. I’ve listed details from one of the WHEDA loan programs below. Please refer to the WHEDA website for the most current home loan details.

Michael Collins, SFR
Short Sales & Foreclosure Resource
Janesville, WI

Are you a first-time buyer? Do you want an affordable home loan with a fixed rate and 100% financing? If so, then you are in luck. Wisconsin Housing and Economic Development Authority (WHEDA) has partnered up with Fannie Mae to bring affordable housing to qualified first-time buyers. You can find a link to WHEDA’s site on Rock Realty’s home page. Here are the features you will find on their site:

FEATURES AND BENEFITS

• Low cost, 30-year fixed interest rate – Ensures the rate on your mortgagewill never increase





• $1,000 minimum borrower down payment – Reduces the cash you need to close your loan





• Reduced mortgage fees – Your mortgage will cost less thanks to the elimination of fees commonly found with other traditional loan products





• If you involuntarily lose your job during the first two years of your mortgage, WHEDA’s job loss mortgage payment protection will cover up to six months of payments.

There are eligibility guidelines as well as income and purchase price limits to this program. You can find them on WHEDA’s site too. Buyers are required to take a home buyers seminar and pass the WHEDA pre-approval. These are good things. You should be educated on owning a home and the pre-approval verifies your ablility to own a home long term.

Rock Realty offers home buyers a 1 percent credit at closing. Follow the below link for further details!
Home Buyer Discounts

This communication is provided to you for informational purposes only and should not be relied upon by you. Rock Realty is not a mortgage lender and so you should contact WHEDA directly to learn more about its mortgage products and your eligibility for such products.