What is PMI?

PMI (Private Mortgage Insurance) is a type of insurance that lenders may require borrowers to pay if they have a down payment of less than 20% of the home’s purchase price. The purpose of PMI is to protect the lender in case the borrower defaults on the loan.

However, once you have paid off enough of your mortgage or your home has appreciated in value, you may be able to get rid of PMI.

Here are some ways to do so:

Pay down your mortgage: If you make extra payments on your mortgage or pay more than the required monthly payment, you can build equity in your home faster and reduce the amount of PMI you have to pay. Once you reach 20% equity in your home, you can request your lender to remove the PMI.

Refinance your mortgage: If you can’t afford to make extra payments, you may consider refinancing your mortgage to a lower interest rate. This could lower your monthly mortgage payment and help you build equity in your home faster. Once you have enough equity in your home, you can request your lender to remove the PMI.

Get your home appraised: If your home has appreciated in value since you bought it, you may be able to get rid of PMI by getting your home appraised. If the appraisal shows that you have 20% or more equity in your home, you can request your lender to remove the PMI.

Wait for automatic termination: If you have a conventional mortgage, your lender is required to automatically terminate your PMI when you reach 22% equity in your home, provided you are current on your mortgage payments.

Why Do Lenders Require PMI?

Lenders require PMI (Private Mortgage Insurance) when a borrower has a down payment of less than 20% of the home’s purchase price. This protects the lender in case the borrower defaults on the loan. If the borrower defaults, the PMI will cover the lender’s losses up to a certain percentage of the loan amount, typically 20% to 30%.

Lenders require PMI because borrowers with less than 20% down payment are considered to be at a higher risk of defaulting on their mortgage. This is because they have less equity in the property, which means they have less of their own money invested in the home. If the borrower defaults, the lender may not be able to recover the full amount of the loan by selling the property.

Without PMI, lenders would likely require larger down payments, which would make it more difficult for many borrowers to qualify for a mortgage.

Note that PMI is not the same as homeowners insurance, which covers damage to the property.

PMI is solely for the benefit of the lender and does not provide any protection for the borrower. The specific requirements and procedures for removing PMI may vary depending on your lender and the type of mortgage you have. It is important to check with your lender to determine what steps you need to take to remove PMI.

Filed under: Real Estate by Julie Woodward
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Buying a home comes with numerous financial planning obligations. It’s far from a turn-key operation and one of the significant challenges involves developing a working knowledge about things often outside your area of expertise.

For example, working as an educator, police officer, investment banker or office staffer does not necessarily make you an expert about home repairs or insurance coverage. Yet, the average homeowner is tasked with carrying a certain level of homeowners insurance coverage without a strong working knowledge.

Many homeowners just purchase enough insurance to cover the purchase price or take the advice of others. Both of those methods could prove wildly deficient.

Rethinking Total Replacement Costs

A distinct difference exists between a home’s purchase price, assessed value and total replacement costs. Let that idea sink in a minute. What you paid for your home and its assessed value have zero to do with what it would cost to rebuild in the event of a total loss!

If you based your homeowners coverage on purchase price or estimated value, the word that comes to mind is: “Yikes.” Here’s why.

Construction costs are based on prevailing market prices that include building materials and labor costs. These vary from region to region and can peak due to materials shortages and shifting prevailing wages. National home-building averages run anywhere from $117 to $125 per square foot. But, even as you read this article, that could change.

Beyond the fundamentals of calculating home construction costs on a square-foot basis, consider that rebuilding your home means that some type of catastrophe occurred. Whether that was a hurricane, tornado, flooding, fire or another disaster, there will likely be cleanup costs.

Before starting new construction, the damaged property will likely need to be razed and damaged materials removed. That comes at a cost.

Building permits and licenses will come at an additional cost. An architectural blueprint and design may need to be secured and that also comes at a cost. The permitting process can be challenging and that could result in you having to rent a temporary residence while your home is rebuilt. Obviously, there are plenty of unforeseen expenses.

Specialty Building Costs

Although average building costs per square foot are a viable standard measure, many homes enjoy specialty items.

Consider that you own a home built decades ago. The high-quality building materials used in construction may be considered specialty items today. They may inevitably be far more expensive than common building materials. If you want the home fully restored, that could cost more than the estimated average.

Accents such as rounded archways or plank-board floors are also more expensive to replace than many average materials. Those are all considerations that need to be tallied when insuring a home.

How To Recalculate Homeowners Insurance

Take the time to calculate the square footage of your home against average construction costs in your area. Factor in specialty items, permitting, razing and other potential hidden costs. Add 10-20 percent. According to some insurance experts, the average home is underinsured by upwards of 22 percent. After the carrier has paid out the coverage limit, overages could become out-of-pocket expenses.

Don’t hesitate to consult with a reputable home builder or insurance expert. Full coverage means accurately accounting for all of the rebuilding costs. 

Filed under: Real Estate by Julie Woodward
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Comparing mortgages is a crucial step in the process of buying a home or refinancing an existing mortgage. Here are some reasons why:

Save Money: Comparing mortgages can help you save money by finding the best interest rates and terms available. A lower interest rate can mean thousands of dollars in savings over the life of a mortgage.

Avoid Pitfalls: By comparing mortgages, you can avoid pitfalls such as hidden fees, penalties, or other unfavorable terms that can cost you money and cause financial stress.

Negotiate Better Terms: If you have a good understanding of what’s available in the mortgage market, you can negotiate better terms with lenders.

Peace of Mind: Comparing mortgages can give you peace of mind that you are making the best financial decision for your situation.

Each person’s financial situation is unique, so finding the right mortgage that fits your individual needs is important. Comparing mortgages can help you find the right type of mortgage, such as a fixed-rate or adjustable-rate mortgage, that suits your budget and financial goals. It can be a complex process, but here are some general steps you can take to help guide you in your search.

Determine your budget: The first step is to determine how much you can afford to borrow. Consider your monthly income, expenses, and savings to figure out how much you can comfortably afford to pay each month towards your mortgage.

Shop around: Look at different mortgage options from different lenders to compare interest rates, fees, and terms. Don’t just go with the first offer you receive, as there may be better options available.

Consider the type of mortgage: There are different types of mortgages available, such as fixed-rate mortgages and adjustable-rate mortgages. Each type has its own advantages and disadvantages, so research and consider which option would work best for your needs.

Think about the length of the loan: Mortgages typically come in 15- or 30-year terms, but other options may be available. Longer terms mean lower monthly payments, but more interest paid over time. Shorter terms mean higher monthly payments, but less interest paid overall.

Check your credit score: Your credit score can affect the interest rate you qualify for, so make sure it’s in good shape before applying for a mortgage.

Get pre-approved: Getting pre-approved for a mortgage can give you a better idea of what you can afford, and it can also help you be taken more seriously by sellers when making an offer on a home.

Remember, taking the time to research and compare your options can help you find the right mortgage for your needs and budget and is an essential step in the home-buying process, and it can help you save money, find the right mortgage, avoid pitfalls, negotiate better terms, and have peace of mind. A mortgage broker can help you find and compare mortgage options from different lenders, which can save you time and potentially help you find a better deal.

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A land survey is an essential tool that is used to determine the exact boundaries of a piece of land or property. It is often required when buying, selling, or dividing land, and is also important for resolving property line disputes.

Process: The process of land surveying typically involves a licensed surveyor visiting the property to take precise measurements and create a detailed map or plan of the land. This may include identifying any physical features of the property, such as trees, buildings, or natural landmarks, as well as any easements or encroachments.

Types: There are several different types of land surveys, each with its own specific purpose. For example, a boundary survey is used to establish property lines, while a topographic survey is used to map the physical features of the land. Other types of surveys include ALTA/NSPS surveys, subdivision surveys, and construction surveys. It is important to select the appropriate type of survey based on the specific needs of your project or property.

Land Surveys Can Be Used For Insurance Purposes

Land surveys can be used for insurance purposes. A land survey can provide valuable information about the physical characteristics of a property, such as the location of buildings, trees, and other features. This information can be used by insurance companies to assess the risk of insuring the property and to determine appropriate coverage and premiums.

For example, if a property is located in a flood zone, a land survey can identify the exact location and elevation of the property, as well as any nearby bodies of water or drainage patterns. This information can be used by insurance companies to assess the risk of flooding and to determine appropriate flood insurance coverage.

Similarly, if a property is located in an area prone to wildfires, a land survey can identify the location of any vegetation, structures, or other features that may increase the risk of fire damage. This information can be used by insurance companies to assess the risk of fire and to determine appropriate coverage and premiums.

Does a fence help a land survey?

Yes, a fence can help a land survey by providing a physical marker of the property boundary. A land surveyor can use the fence to determine the location of the property line and ensure that the fence is placed within the boundaries of the property. This can be particularly useful in situations where the property line is not clearly defined or where there may be disputes over the location of the boundary.

It is important to note that a fence alone is not sufficient to establish the legal boundary of a property. In order to accurately determine the property line, a land surveyor will need to conduct a thorough survey that considers all available evidence, including property records, physical markers, and other relevant factors. Additionally, it is possible for a fence to be installed in the wrong location, either intentionally or accidentally, which can result in boundary disputes and other legal issues. Therefore, while a fence can be a useful tool in a land survey, it should not be relied on exclusively to determine the property boundary.

Overall, a land survey can provide valuable information for many purposes and can help property owners make informed decisions about insurance coverage and risk management.

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When it comes to buying or selling a home, working with an experienced real estate agent can be the difference between success and failure. Not only do agents possess access to the Multiple Listing Service (MLS) — a comprehensive database of properties for sale — they also provide invaluable insight into local markets, saving buyers and sellers time by handling many of the tedious tasks associated with transactions. 

Access To The Multiple Listing Service: MLS

From scheduling showings and negotiating offers to managing paperwork from start-to-finish, having an experienced professional on your side makes all the difference in navigating even complex deals without any hassle. Furthermore, their knowledge allows them to source homes that match exactly what you’re looking for — saving hours of research at no extra cost! 

A Real Estate Agent Saves Time

Real estate is never easy, but having someone who knows how this industry works inside out gives you peace of mind throughout every step along the way. Whether you’re buying or selling a property; entrusting these responsibilities to an expert means allowing yourself more free time while knowing that your transaction is in capable hands.

An Agent Can Help Identify Potential Concerns With The Home

For buyers and sellers alike, partnering with a qualified real estate agent can make all the difference when it comes to navigating the complex world of real estate. From uncovering potential issues that may have gone unnoticed to negotiating for better prices on both ends – an experienced agent has the expertise needed to simplify and expedite transactions while ensuring their clients get what they deserve. 

Save Money And Negotiate On The Final Price

A knowledgeable professional can spot problems such as structural damage or legal hiccups that may be hidden from novice eyes; helping buyers avoid costly repairs or fees down the line. Sellers, too, benefit from working with an agent who knows how to maximize exposure of their property in order to attract potential buyers, ultimately fetching them top dollar for their home. 

Work With A Qualified Real Estate Agent

Real estate agents offer countless advantages over going it alone when buying or selling a house; understanding local markets, saving time by streamlining processes, and employing savvy negotiation skills are just some of them! Ultimately, investing in an expert partner is often well worth it — so don’t hesitate to ask for help today if you’re looking into making your next move!

Filed under: Mortgage, Real Estate by Julie Woodward
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One of the main reasons people Airbnb their homes is to earn extra income. By renting out their homes to guests, hosts can earn money that can be used to pay bills, save for a vacation, or invest in their future. The decision to Airbnb your home ultimately depends on your personal circumstances and preferences.

Here are some factors to consider that can help you make an informed decision:

Legal Requirements: Before you decide to list your home on Airbnb, make sure you are legally allowed to do so in your area. Check your local regulations, zoning laws, and HOA rules to ensure that short-term rentals are permitted. Failure to comply with these regulations could result in legal penalties and fines.

Financial Considerations: Renting out your home on Airbnb can be a great way to earn extra income, but it’s important to consider the financial costs and benefits. Consider the amount of time and money you will need to spend to get your home ready for guests, such as cleaning fees and repairs. Also, consider the opportunity cost of not using your home during the rental period.

Property Management: If you’re planning to rent out your home while you’re away, it’s important to have someone who can manage the property and handle any issues that arise with guests. This may require hiring a property manager or cleaning service, which will add to your costs.

Increased Wear and Tear: Renting out your home on Airbnb can result in increased wear and tear on your property, which may require more frequent repairs and maintenance. This can be especially true if you have multiple guests staying in your home on a regular basis.

Safety and Security: Airbnb offers various safety features and guidelines to protect hosts and guests, but there are still risks associated with hosting strangers in your home. Make sure you have adequate insurance coverage and take necessary safety precautions, such as locking up valuables and installing smoke detectors and carbon monoxide detectors.

If you feel comfortable with the above considerations and believe that renting out your home on Airbnb is a good fit for you, then it could be a worthwhile decision. However, if you have any reservations or concerns, it may be best to explore other options for earning extra income.

Filed under: Real Estate by Julie Woodward
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A mechanic’s lien is a legal claim placed on a property by a contractor, subcontractor, or supplier who has provided labor, materials, or equipment to improve the property. The lien serves as security for the payment of the debt owed to the party who provided the services or materials.

Mechanic’s liens are typically used in the construction industry, where contractors and subcontractors may perform work on a property and then have difficulty obtaining payment from the property owner. The lien provides the contractor with a legal means to collect payment for their work by placing a hold on the property until the debt is satisfied.

How a Mechanic Lien is Placed

To initiate a mechanic’s lien, the contractor or supplier must follow a specific set of procedures, which can vary depending on the jurisdiction. Generally, these procedures involve filing a notice of claim with the appropriate government office, notifying the property owner of the claim, and giving the owner an opportunity to dispute the claim.

If the claim is not disputed, the lien will remain on the property until the debt is paid. If the debt is not paid, the lien can be enforced through legal means, such as a foreclosure sale.

Reasons a Mechanic Lien Would be Placed

There are several reasons why a mechanic’s lien may be placed on a property:

• Non-payment: The most common reason for placing a mechanic’s lien is non-payment. A contractor, subcontractor, or supplier may place a lien on the property if they have not been paid for their work, materials, or services.
• Breach of contract: If a property owner breaches a contract by failing to pay for work that has been completed, a contractor or supplier may place a lien on the property.
• Unpaid taxes or fees: Mechanic’s liens may also be placed on a property if the property owner has not paid property taxes, assessments, or other fees associated with the property.
• Fraudulent or deceptive practices: In some cases, a mechanic’s lien may be placed on a property if the property owner engaged in fraudulent or deceptive practices, such as misrepresenting their financial position or misrepresenting the scope of the work that was required.
• Dispute over work performed: Occasionally, a dispute may arise between a property owner and a contractor or supplier over the work that was performed. In such cases, a mechanic’s lien may be placed on the property as a way to resolve the dispute and secure payment for the work that was completed.

It is important to note that the laws surrounding mechanic’s liens can vary from state to state, and the specific reasons for placing a lien may also differ depending on the jurisdiction.

Mechanics’ liens can be complicated, and the laws surrounding them can vary from state to state. Therefore, it is recommended that contractors and property owners consult with an attorney who is familiar with the relevant laws in their jurisdiction.

Filed under: Mortgage, Real Estate by Julie Woodward
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When you go through the process of applying for a mortgage, you need to make sure you understand all of the terms on the page. Two of the most common numbers you will come across include the mortgage rate and the APR. Many people associate both of these numbers with interest rates, but you will probably notice that they are not quite the same. What are the differences between these two numbers, and how are they going to impact your mortgage loan?

The Mortgage Interest Rate

The first number you are probably going to look at is the mortgage interest rate. This reflects the additional money that you will be charged over the life of the mortgage. For example, if you take out a loan for approximately $250,000 that has an interest rate of 5 percent, you will end up paying not only the principal but also an interest component of approximately $233,000 over the life of the loan. Keep in mind that an interest rate can be fixed or variable, so make sure you read the application carefully. 

Annual Percentage Rate (APR)

The other number that you might see is your APR. This calculation is a bit more complex because it considers all facets of your application, not just the interest rate on the mortgage. Your APR is going to include other values as well, such as private mortgage insurance premiums, discount points, closing costs, and other closing expenses. This number might be a bit harder for people to understand, but it will also give you a more accurate picture of the total cost of your mortgage.

Ask Questions Before You Sign Your Contract

Because there are so many moving parts involved when you apply for a mortgage, you need to take the time to ask questions before you sign on the dotted line. You will be focused on your primary interest rate, as it will play a major role in the total cost of your loan as well as your monthly payment; however, you need to have an accurate picture of the other fees associated with your home loan as well. Reach out to an expert who can help you find the right mortgage to meet your needs.

Filed under: Real Estate by Julie Woodward
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Owning a home can be an exciting and rewarding experience, but it’s important to be aware of the expenses that come with homeownership. Understanding these costs can help you prepare for and manage them effectively, ensuring a smoother transition into your new home.

The Mortgage Payment

The mortgage payment is typically the largest expense that homeowners face. This monthly payment consists of the principal and interest on your home loan. The principal is the amount you borrowed to purchase the home, while the interest is the cost of borrowing the money. The length of your loan term and the interest rate will determine the size of your monthly mortgage payment. Keep in mind that paying down your principal faster can reduce the total interest paid over the life of the loan.

Your Property Taxes

Property taxes are another significant expense for homeowners. These taxes are levied by local governments and are typically based on the assessed value of your property. Property tax rates can vary widely depending on the location of your home and the quality of public services in the area. Be sure to factor in property taxes when determining the affordability of a home, as they can make a substantial difference in your overall housing costs.

Homeowners Insurance

Homeowners insurance is an essential expense that protects your investment in your home. This type of insurance covers damage to your property and belongings, as well as liability in the event someone is injured on your property. The cost of homeowners insurance can vary depending on factors such as the value of your home, the amount of coverage you choose, and the location of your property. 

HOA Dues

If you live in a community governed by a homeowners association (HOA), you may be required to pay monthly or annual dues. These fees cover the maintenance of common areas, amenities, and services provided by the HOA. It’s important to understand the costs associated with HOA dues and what services they cover, as they can add to your overall housing expenses. Be sure to review the HOA’s rules and regulations before purchasing a home in such a community, as they can impact your ability to make certain modifications to your property or how you use the common areas.

Budget For These Expenses Accordingly

Understanding and preparing for the top expenses of homeownership is crucial for a smooth and successful experience. By considering the mortgage payment, property taxes, homeowners insurance, and HOA dues, you can better anticipate the costs associated with owning a home and make informed decisions about your budget and financial planning.

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Choosing the perfect home to settle in can be a tough decision. You have to weigh in on many factors including price, size, features and amenities, number of bedrooms and baths, design, and so on. However, all these factors are not enough to give you a great home ownership experience if you fall into the wrong neighborhood.

Picking the right neighborhood not only guarantees you happiness and comfort, but also helps with home appreciation for the sake of future re-sale value. In most cases, though, it can be tougher to find the perfect neighborhood than it is to find the right house.

Here are some factors that can help you find the right neighborhood:

Schools

If you have kids and the quality of their education is a priority, consider a neighborhood with a reputable school district. Even if you don’t have kids, such a neighborhood will most likely boost your home’s appreciation. You may also find it easier to find a buyer if you decide to move away from the neighborhood.

Crime Rate

No one wants to live in a neighborhood with high crime rates. This is one of the basic factors that you must consider when searching for a new neighborhood. Check the area’s crime statistics from the local authorities, search online, or ask your potential neighbors.

Transport

This is also a key factor to consider. How far do you have to drive to work from the new neighborhood? How much traffic will you encounter in the area?

If you don’t drive, are there adequate public transportation networks in place? How will your kids travel to school? Make sure that the new neighborhood meets all your transportation needs.

Basic Amenities

Is the neighborhood close to basic amenities that you are used to or that you rely on? Such amenities may include a nearby hospital, pharmacy, grocery store, bank or ATM, and law enforcement center. 

Recreational Amenities and Activities

Does the neighborhood have a park where you can go for a picnic with your partner or where your kids can play and make friends? Are there cultural attractions such as concerts, art exhibits and film shows?

Are there bars, movie theatres and restaurants close by? Are there malls or stores where you can go shopping during the weekends? What about a library, gym or community swimming pool?

If you are fun-loving person, make sure your neighborhood can provide as much fun as possible. You don’t want to start having regrets about a boring neighborhood in less than a year after settling in.

Community Engagement

Are you looking for a neighborhood with a sense of anonymity or a sense of belonging? In some neighborhoods, neighbors hardly know each other while in others, block parties and community events are a common thing. Which one would you prefer?

It is not easy to find everything you want in one place, but you can definitely get most of it in a certain neighborhood if you search well enough. Create your wish list and contact your trusted real estate professional so that they can help you find your dream house in the best neighborhood for you. 

Filed under: Real Estate by Julie Woodward
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