5 Tips Every Renter and Homeowner Should Know About Insurance

This week, I had to evacuate because of Hurricane Dorian. If you’ve ever experienced a natural disaster or had to evacuate your home, you know that insurance is a top concern. No matter where you live, there are common threats—such as California earthquakes, Oklahoma tornados, and Texas floods—that affect renters and homeowners.

Let's review five essential insurance tips that every renter and homeowner should know. You’ll learn the variety of protections you get from basic renters and home policies, mistakes to avoid when buying a policy, and ways to save money on premiums.

5 Tips Every Renter or Homeowner Should Know About Insurance

  1. Not every type of damage is covered
  2. Certain belongings have low coverage limits
  3. Know the difference between cash value and replacement cost
  4. There are special types of deductibles
  5. Don’t leave discounts on the table

Here’s more information about each insurance tip.

1. Not every kind of damage is covered

A basic homeowners policy pays for claims when a natural disaster—such as a fire, tornado, hail, or windstorm—damages your property. Personal belongings like your furniture, electronics, and clothing are generally covered up to specific limits for damage and theft.

Home insurance includes liability, which protects you from legal issues that could arise if someone is hurt on your property.

Homeowners coverage also pays "additional living expenses." That might include things like some amount of hotel and meal expenses if you can't stay in your home after a covered disaster.

If you’re a renter, you also need insurance, because your landlord is not required to cover you. Renters insurance gives the same protections as a homeowners policy. You get coverage for your personal belongings, liability, and additional living expenses. But it doesn’t cover damage to rental property because that’s your landlord’s responsibility.

Unfortunately, about half of renters don’t have renters insurance. Many mistakenly believe that their landlord would pay to repair or replace their damaged or stolen personal belongings. Or they mistakenly think a renters policy is too expensive. The good news is that a typical renters policy is quite affordable, costing just $185 per year on average across the U.S.

The good news is that a typical renters policy is quite affordable, costing just $185 per year on average across the US.

But what surprises many people is that a standard home or renters policy doesn't cover some natural disasters. These include earthquakes and flooding from groundwater.

If you live in an earthquake-prone area, you can typically add earthquake coverage to a home or renters policy. But flooding is a different category of insurance that must be purchased separately. Flooding is handled differently than other types of disasters because it’s the nation’s most common and expensive disaster. Floods can happen anywhere, and they don’t even have to be catastrophic to cause significant damage.

If your town or community participates in the National Flood Insurance Program, you can buy a policy for your rental or your home. And if you buy a home in a designated flood zone, mortgage lenders typically require you to have flood insurance.

Most flood policies have a 30-day waiting period, so you can’t wait until a storm is bearing down on you to sign up. You'd be too late.

Even though the federal government backs flood insurance, it’s brokered by regular insurance companies or agents. You can learn more at floodsmart.gov.

Most flood policies have a 30-day waiting period, so you can’t wait until a storm is bearing down on you to sign up.

Remember that water damage from rain, high winds, or a tree that fell on your roof are covered by a standard home or renters insurance policy. But damages to your home or personal belongings that occur due to rising groundwater are never covered, except when you have flood insurance.

Also note that if you have a home-based business with inventory, specialized equipment, or customers who enter your property, you typically need a commercial policy. Likewise, if you turn your home into a rental, Airbnb, or a vacation property, you generally need additional coverage or a landlord insurance policy.

2. Certain belongings have low coverage limits

Just like not every disaster is covered, not every type of personal belonging is fully covered under a home or renters policy. Some belongings, such as cash, aren’t coved at all. Many others have coverage caps.

For instance, jewelry, watches, furs, silverware, electronics, and firearms are typically limited to one or two thousand dollars of coverage. If you have jewelry that’s worth $10,000 and it’s lost or stolen, you’d come up very short with just $2,000 of coverage.

If you have items worth more than the coverage caps, you can add an insurance rider for more coverage. This addition is known as “scheduling” your personal property. It costs more, but it gives your most expensive items separate coverage so they could be replaced.

Another often-overlooked protection you get with renters and home insurance is that your belongings are covered outside of your home.

Another often-overlooked protection you get with renters and home insurance is that your belongings are covered outside of your home. If your vacation luggage gets stolen, you lose valuable jewelry, or your laptop gets stolen from your car, your homeowners or renters policy covers it.

So, pay close attention to the insurance limits for possessions inside and outside of your home and consider adding a rider or property schedule to beef up coverage when needed for valuable items.

3. Know the difference between actual cash value and replacement cost.

It can be a little confusing to know exactly how much money you’d receive from a renters or home insurance claim. So be sure you understand the different types of policies you can buy.

Actual cash value coverage pays to repair or replace your property or possessions up to the policy limits, minus a deduction for depreciation. The calculation can vary from insurer to insurer. But what you need to know is that a cash value policy only pays a percentage of what it would cost you to go out and buy a new item.

Cash value coverage is the least expensive option. However, it means that if you experience a severe disaster, you probably won't receive enough to rebuild your home or fully replace personal belongings.

Replacement cost coverage pays to repair or replace your property and possessions up to the policy limits, without a deduction for depreciation. That means you would receive enough money to rebuild a home with materials of similar quality. Or buy new items to replace your damaged belongings.

Yes, replacement coverage costs more than cash value. But it would allow you to replace what you lost.

There are also guaranteed or extended replacement cost policies which give you even more protection. They pay to replace your home as it was before a disaster, even if costs more than your policy limit.

Remember that a home insurance policy is based on the cost to rebuild your home and any outbuildings, not the amount you paid for the property or its appraised value.

Remember that a home insurance policy is based on the cost to rebuild your home and any outbuildings, not the amount you paid for the property or its appraised value. You never include the value of your land in your home insurance. Depending on the age, location, and style of your home, the insured value could be much higher or lower than its market value.

4. There are special types of deductibles.

A deductible is an amount you’re responsible for paying for an insured loss. The higher your deductible, the more you can save on premiums. So be sure to get quotes for different deductible amounts when shopping for renters and home insurance.

As I previously mentioned, disasters such as windstorms, hailstorms, and hurricanes, are typically covered by standard renters and home insurance. However, in some high-risk areas, you may have separate deductibles for damage caused by these disasters.

According to the Insurance Information Institute, nineteen states and the District of Columbia have hurricane deductibles: Alabama, Connecticut, Delaware, Florida, Georgia, Hawaii, Louisiana, Maine, Maryland, Massachusetts, Mississippi, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Texas, Virginia and Washington D.C.

These special deductibles are additional and separate from the regular deductible for all other types of claims, such as fire or theft. A hurricane deductible applies only to damage from hurricanes, and windstorm or wind/hail deductibles would apply to any wind damage.

Hurricane and wind deductibles are typically given as a percentage that may vary from 1% to 5% of a home's insured value but can be even higher in some coastal areas. The amount you must pay depends on your insured value and the "trigger" event.

For instance, if you have a 3% hurricane deductible and your home is insured for $200,000, you’d be responsible for the first $6,000 ($200,000 x 3%) in repair costs. That’s much more expensive than paying a standard $500 or $1,000 home deductible.

In some states, the triggering event for hurricane deductibles to apply is when a Category 1 storm causes damage whether it made landfall or not. Other states allow Category 2 to be the threshold. In others, a hurricane deductible applies from the moment a hurricane watch or warning gets issued until 72 hours after it ends.

A hurricane deductible can only be applied once each hurricane season, from June to November.

5. Don’t leave discounts on the table.

When it comes to the price of renters and home insurance, there are some factors you can control and some you can’t. Here are some ways to save and typical discounts to ask for:

  • Bundling insurance is when you purchase different types of policies, such as renters or home and auto, from the same insurance company. Buying two or more policies can help reduce your total cost. Just make sure that the combined price from one insurer is less than buying policies separately from different insurers.
  • Shopping around may seem obvious, but many people don’t do it. Prices can vary considerably from insurer to insurer. Be sure to compare the same coverage and deductibles to get the best deal possible.
  • Installing safety features in your home or rental, such as smoke detectors, alarm systems, deadbolts, storm shutters, shatterproof windows, or roofing, may allow you to qualify for discounts. Even being a non-smoker or being retired reduces the risk for insurers, so be sure to let them know any factors that could work in your favor.
  • Raising your deductible is an easy way to cut the cost of premiums. Just make sure that you could afford to pay it in the event of a claim. Also, the savings vary depending on where you live and your insurer, so get quotes with multiple scenarios.
  • Maintaining good credit is vital for many aspects of your financial life, including the rates you pay for home, renters, and auto insurance. Depending on where you live, having poor credit can cause you to pay double the premium compared to having excellent credit! The only states that currently prohibit home insurers from using credit when setting rates are California, Maryland, and Massachusetts
  • Being a loyal customer can pay off with a discount. However, don’t let that keep you from periodically shopping around to make sure you’re still getting a good deal.

No one enjoys paying for home or renters policy, but when disaster strikes, you’re the victim of theft, or you get involved in a lawsuit, having insurance can be a financial lifesaver.

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Source: quickanddirtytips.com

How To Avoid Being House Poor

How Much Home Can I AffordEarlier this year, I published the post Is Being House Poor Limiting You? While no one ever thinks they will fall into being house poor, it does happen to some. Due to this, when asking yourself the question “how much home can I afford,” it’s best to think about ALL of the expenses that go into homeownership.

There are many “hidden” costs that go into homeownership that many do not think about when buying a home. While some homes may seem affordable, there are many factors and expenses to think about.

According to recent data from Zillow:

  • U.S. homeowners on average spend more than $9,000 per year in hidden homeownership costs and maintenance expenses
  • U.S. homeowners pay an average of $6,042 per year in unavoidable hidden costs: homeowners insurance, property taxes and utilities
  • U.S. homeowners pay an average of $3,435 per year in annual optional costs including house cleaning, yard care, gutter cleaning, carpet cleaning, and pressure washing.

That’s a lot of extra money each year that many homeowners do not realize that they may need to pay for.

By not knowing about these costs, a person may become stressed due to the amount of debt they may rack up from being house poor. It may also delay retirement, lead to a house being empty (there might be no money left to decorate), and more.

There are things you can do though so that you can make sure you don’t fall into a house poor situation, though. When pondering the question “How much home can I afford,” think about the many tips below.

 

Add up all of the costs.

Buying a home can easily lead to being house poor if you don’t do enough research. This can limit you because you may be even more house poor than you originally thought.

When some families buy a home, they don’t think about the total cost of homeownership. While you may be able to afford the monthly mortgage payment, you may not be able to afford everything else if you don’t do your research.

Before you say “yes” to a home, I recommend you add up all of the extra costs that you may have to pay for if you decide to buy a specific home.

Other homeownership costs include:

  • Gas. Many homes run on gas in order to have hot water, to use the stove, and so on.
  • Electricity. Generally, the bigger your home then the higher your electricity bill will be.
  • Sewer.  This isn’t super expensive, but it is generally around $30 a month from what I’ve seen.
  • Trash.  This isn’t super expensive either but it does cost money.
  • Water (and possibly irrigation).  Water bills can vary widely. I know many who live in areas where the average water bill is a few hundred each month.
  • Property taxes. Property taxes can vary widely from town to town. You may find yourself looking at two similar houses with similar price tags, but the property taxes may vary by thousands of dollars annually. That is a LOT of money. While it may seem small when compared to the actual home purchase price, remember that you have to pay property taxes annually and a difference of just $3,600 a year is $300 a month for life.
  • Home insurance. Home insurance can be cheap in some areas but crazy expensive in others. Don’t forget to look into the cost of earthquake, flood, and hurricane insurance as well as that can add up quickly depending on where you live.
  • Maintenance and repairs. Even if your home is brand new, you may have to pay for repairs, which is something that many don’t realize. No matter how old your home is, repair and maintenance costs will eventually come into play.
  • Homeowners association fees. This can also vary widely. You should always see if the house you are interested in is in an HOA because the fees can be high and there may be rules you don’t like as well.
  • Home furnishings. Furnishing your home can be done cheaply, but I know some who buy huge homes but can’t afford to put anything in them, such as a table, a bed, and so on. Why own a $500,000 house if you don’t have any furniture?

Related: Home Buying Tips You Need To Know Before You Buy

 

Buy for less than what you are approved for.

Many potential homeowners are approved for home loans that are somewhere around 30% to 35% of their salary before taxes.

That’s a lot of money. This amount is before taxes as well, which means that your actual monthly home payment would be a significant portion of your take-home income each month. Many who buy at the full approval amount cannot afford their homes due to the fact that it is such a significant percentage of what they earn.

If you don’t want to be house poor, then you should make sure to buy a home that is less than what you are approved for. You should also add up all of the costs of owning a home and make sure it is an amount that you are comfortable with.

Related posts:

  • Renting Out A Room In Your Home For Extra Money
  • How To Live On One Income
  • Ways To Make An Extra $1,000 A Month

 

Have an emergency fund.

An emergency fund isn’t just to protect you from your job. They also exist to help you in case something goes wrong with your home.

Your roof could spring a leak, a tree may fall on your home, a pipe may burst, there may be an electrical problem and more. Homes have many things that go into them and you never know if something may need to be fixed.

By having an emergency fund, you will have a fund that will help you if something were to go wrong. It will be you be more prepared so that you don’t have to take on any debt in order to help pay for an expense.

What would you say to someone who asks “How much home can I afford?” Do you know anyone who is house poor?

 

The post How To Avoid Being House Poor appeared first on Making Sense Of Cents.

Source: makingsenseofcents.com

Podcast #13: Commercial Lending and Real Estate

podcast 13 commercial lending and real estate
For this podcast about commercial lending I sat down with Angie Hoffman at U.S. Bank.  During the podcast we discussed investing in real estate, commercial lending, and how commerceial mortgages can help investors.  If you want to learn more about commercial loans this is a great pdocast for you.
I hope you enjoy the podcast and find it informative.  Please consider sharing with those who also may benefit. Listen via YouTube: You can connect with Angie on LinkedIn.  You can reach out to Angie for more information on their lending products by emailing her at angela.hoffman@usbank.com.
You can connect with me on Facebook, Pinterest, Twitter, LinkedIn, YouTube and Instagram.
About the author: The above article “Podcast #12:  Hard Money Lending” was provided by Luxury Real Estate Specialist Paul Sian. Paul can be reached at paul@CinciNKYRealEstate.com or by phone at 513-560-8002. If you’re thinking of selling or buying your investment or commercial business property I would love to share my marketing knowledge and expertise to help you.  Contact me today!
I work in the following Greater Cincinnati, OH and Northern KY areas: Alexandria, Amberly, Amelia, Anderson Township, Cincinnati, Batavia, Blue Ash, Covington, Edgewood, Florence, Fort Mitchell, Fort Thomas, Hebron, Hyde Park, Indian Hill, Kenwood, Madeira, Mariemont, Milford, Montgomery, Mt. Washington, Newport, Newtown, Norwood, Taylor Mill, Terrace Park, Union Township, and Villa Hills.
TRANSCRIPT
Commercial Lending Podcast
 
Paul Sian: Hello everybody. This is Paul Sian, Realtor with United Real Estate Home Connections, licensed in the State of Ohio and Kentucky. With me today is Angie Hoffman with US Bank. Angie how are you today?
Angie Hoffman: I’m doing great Paul. How are you?
Paul Sian:  Great. Thank you for being on my podcast. We’re gonna start off. Today’s topic is ‘Commercial Lending’. Angie is a commercial lender with US Bank, as I mentioned. Angie, why don’t you tell us a little bit by your background. What you do with the US bank, and how did you get started in that field?
Angie Hoffman: Sure. So, I am a Cincinnati resident, have been my entire life. Was previously with a company called the ‘Conner group’, which is located out of Dayton, Ohio. They’re a private investment real estate firm. I was with him for about five plus years, just learned a ton of information, really loved the financing portion of their group. So, that turned me to the banking portion, which I ended up going with US Bank just because of the knowledge and the breadth of what they can do as well. Just the culture within US Bank has been phenomenal. I’ve actually been with us Bank now for five years; in the last three years I’ve been within the commercial real estate side as well as the business banking side.
Paul Sian: Okay. Your primary focus is commercial loans.
Angie Hoffman: Correct. Yes, both investment real estate as well as owner-occupied and small to medium businesses. 
Paul Sian:  Okay. The investment side, I represent a lot of buyers of multifamily. I know with the form below we do, the conventional space generally, and then when you’re in the five units and above. You go into the commercial space, which is your space. I have also heard it being covered with mixed-use buildings, industrial properties, is there something else that commercial loans would cover?
Angie Hoffman: Correct. I mean it can really be quite an array of properties, office is one that we see pretty often, and can tend to be either hot in certain areas, whether it’s office Class B or Office Class A. Retail strip centers, we’ll look at Triple Net properties, and absolute not properties. We are very popular, if you’re looking at diversifying a multi-family portfolio and adding in some triple net properties. We also do, obviously owner-occupied properties too. When you have that small business or medium business owner who wants to own their own real estate. We do that as well, and that’s again part of what my position entails, and then we will also look at portfolios will do single-family homes. 
I’m actually working with somebody now who has a portfolio of several single-family homes, that were looking to kind of restructure and refinance for him. We can even utilize current equity and properties to purchase additional properties to help you grow your portfolio. We do try to have a full understanding of your portfolio or a full understanding of what your strategy is. How partner with you, as you continue to grow that portfolio short- and long-term goals.
Paul Sian: For our listeners, who don’t know. What Triple Net means, do you mind explaining that.
Angie Hoffman:  Sure. So, Triple Net is gonna tend to be your properties that have the tenant itself is paying the taxes, the insurance, you may have some pretty minimal depending upon the property, responsibilities that are usually restricted to the exterior of the building. It may be like a roof or a parking lot. Type of maintenance but generally speaking the great thing about the triple net is that for some clients, it’s a property that you can basically own, and you have to do pretty much nothing with. So, you’re gaining that income without having to do a very minimal type of responsibility or maintenance. 
The downfall of that is that typically they’re gonna be somebody, who is gonna be a longer-term lease, which is great. However, you still have the issue that it’s a bigger square footage generally. So, five, ten, twenty thousand plus square feet. If you lose a tenant obviously, that can be very impactful. It just depends upon your, again your focus of your portfolio, and if you want to add in that. But it can be great opportunity, but tends to again be a little bit less of a return. Because of the minimal responsibilities.
Paul Sian: Going back to single family. That is similar, I am using the same term your bank use but to ‘wrap mortgage’. Is that what you use for single families?
Angie Hoffman:  We do have the ability, from the perspective of what you say wrap mortgage.  We’re typically calling that like an umbrella, if you’re grouping all, let’s call it, if there’s ten single family homes. You’re grouping this all into one, it lies together. We have the ability to do that depending again on the structure that the client is looking for. 
We also have the ability to separate out those facilities, and do a simultaneous closing for each one of them to have them separated out from each other. Obviously, there’s some contingencies but that the properties itself have to be able to cash flow by themselves, things along those lines that we would underwrite to. But we do have ability to look at it from both perspectives.
Paul Sian: Okay. The biggest advantage of that if someone has reached the maximum ten convention mortgage loanlimit. They can step into your space there and you could cover them, and they can either restart that or. With something like that, let’s say somebody does get ten properties, and are they able to finance in additional properties into that same loan or is that has to re-finance each time?
Angie Hoffman: No. We would be able to add in. I mean, if you’re asking like if they want to refinance these properties, and they’re also looking to maybe either use some of the equity in them or they’re also buying at the same time. We can do all of that together, so that’s not an issue at all.
Paul Sian: Let’s say to somebody new coming to investment. What is the typical down payment on commercial loans? That are looking to buy in the mixed-use space or multifamily space?
Angie Hoffman: So, generally speaking. We’ll go up to 80% loan-to-value. The biggest factor within that is gonna be how much the capability of the property to hold that debt. We’re gonna have, we have a pretty. I don’t want to say complex but we do have  multiple factors that go within our cash flow, and net operating, income calculation, that we’re gonna want to see. It balanced to a certain point for it to be able to hold the debt at an 80% loan to value. Again, we tend to partner with our clients. I have several clients who will send me properties on a daily basis, that they’re interested in. We will let them know what the debt capacity would be on that property.
Paul Sian: Okay. Income from the rents per sale, let’s say, something’s got a ten-unit building. Then you’re looking at the rents that are coming in. You’re also considering the buyers income level, income to debt ratio, all that as well.
Angie Hoffman: Yes. When I talk about the capacity, the debt for the property is being the one of the first things we look at is. In order to get to that 80% LTV, if you’re looking at the actual depth, they’re wanting the property to take on. Compared to other rent they’re taking in and the expenses, as well as some vacancy factors, things like that. That’s what we’re looking at to have a certain ratio, then on top of that. When we get to the next step would be look at the client globally, and their personal debt to income, and that factor too.
Paul Sian: Looking at that commercial mortgages, can buyer use the mortgage to upgrade property, to build in some equity in the property. Does the building of the equity get taken into account, and do you have a loan that allows them to do that?
Angie Hoffman: That question is kind of twofold. If you have a property, let’s say, it’s multiple unit, and you’re continuing to kind of do some improvements and renovations. If the property has the equity, we can look at small lines of credit to help with that renovation cost. Then once everything’s complete to be able to wrap that together. If you’re looking at a property that’s completely distressed, and doesn’t have any type of income. Then that’s gonna be something that generally we’re gonna have a harder time with. Because it’s a speculative type of scenario, and we want to typically see the actual income.
Paul Sian: How about converting something, I am interested in buying warehouse, either in retail space or multifamily. Do you offer products for that, or is that a similar situation when you’re looking at the risk as being a little high?
Angie Hoffman: Yes. So, that is gonna be a similar situation. Once the actual project would be completed again from a speculative standpoint, it just it becomes a little bit more difficult from a risk perspective. However, we’ve been in scenarios where we’ve worked with clients and partnered clients, people we know who work in that space more than we do. We can look to, guide them to what we would look at if we wanted to refinance that once it was completed, and there were leases in place.
Paul Sian: Okay. So, that is one of the benefits working with a big bank like US bank, is you can reach across departments there, and tap other resources within your organization.
Angie Hoffman:  Even if it’s within the organization, we have other resources whether it’s our private wealth or wealth group, have some capabilities that are different than what we have as well as from a CUI or network basis. It may be somebody just within my network that I know works within that space to introduce that way and hopefully can get that client taken care of.
Paul Sian: Are you able to comment on the underwriting process of commercial loans compared to residential. Is there a big difference in that process? 
Angie Hoffman: So, yes and no. I know we touch on it already a little bit. One of the biggest differences is obviously we’re gonna look at the actual collateral in a very different way, especially on the investment real estate side. When you’re looking at investment real estate, the factors that the net operating income as well as the cash flow of the property become factors. Whereas, when you’re buying a home, obviously it’s a lot more about the loan to value of the property. However on the other side of that, if we are looking at a property that’s gonna be owner occupied by a small to medium business. It becomes a lot more about the loan-to-value as well. So, it can depend upon the situation.
Paul Sian: Okay. How important is the person’s experience when they come to loan, get a loan for you. If it’s a new first-time investor looking at multi families versus somebody who’s already got five to ten units and then either self-managing or running it for a couple years.
Angie Hoffman: I mean, generally speaking, if you have somebody brand new, one of the biggest things is if you’re not familiar in the scope. You don’t have experience, you gonna be partnering  potentially with a property management company or somebody else who is maybe a partnership within the LLC or the property that you’re buying that has the experience. Just being able to show you may not have previous experience in this but you are partnering with a property management company that has historical success in these properties. You’re partnering with somebody, for instance, who has historical success in the properties.
Paul Sian: So, yeah boils down to your team then. What you’re bringing to the team. What kind of document requirements are there to start a commercial loan process with US bank?
Angie Hoffman: Generally speaking, in every situation is different, every request is different, client is different. But it’s typically going to be two to three years of taxes, personal and business, personal financial statements pretty standard as well. If it’s a purchase, we’re gonna want to see a purchase agreement or understand the purchase agreement as well. As you’re gonna want to have financials whether it’s profit loss or the rent rolls preferably a Schedule E or 8852 from the client. Showing what the historical trends of that property of have been. That’s where we really try and partner with our clients of understanding their portfolios, understanding what purchase they’re trying to make. So, that, does it fit, and is there anything we see because we see them on a very regular basis that. Maybe we need to discuss or let the client know that we are suggesting maybe prying a little bit more information.
Paul Sian: How important is ones credit score when they come to apply for loan with you?
Angie Hoffman: It is a factor, I mean. In any type of just like the traditional mortgage, it is gonna be a factor. But there are so many different factors that, it’s only one of many.
Paul Sian: One of the important things when it comes to purchasing real estate is I always tell the buyers that have a pre-approval letter ready. Is there something similar in the commercial loans place? A pre-approval letter, pre-qualification letter. Just something that says, somebody sat down with you, they started the initial process. They’ve got access to certain amount that they can borrow to purchase this property. Do you have something like that?
Angie Hoffman: We do. So, on the commercial side it’s gonna be called a letter of interest, and it basically lays out that we are working with a client. We have a price range or up to a price range that we’re looking for with the client, and depending upon the collateral. We are looking to work with him on the financing, again depending upon what the collateral is, and then we also have once we’ve actually maybe gone through a more official process of underwriting and submitted an actual financial package. We do have, depending again on what the financing contingency is for that client. 
We do have a letter of commitment, which lays out that there is an approval but it goes through all of the conditions as well like your appraisal certain things like that, that we’re gonna have to clear.
Paul Sian: Okay. How long does that process take? If you are writing an offer today for a client, and then usually you have to write in how many days we’re gonna close in. 30 days, 40 to 45 days. I know conventional, it’s usually a little quicker, a little easier. So, we can do it in 30 days or so. I mean, what would you recommend for a commercial loan?
Angie Hoffman: I think 45 days is very practical. One of the biggest things that I always talk about with my clients is that 45 days really is incumbent of me having a full financial package, meaning those two years of tax returns. The financials, I spoke about from the client that you’re purchasing, and or if you’re refinancing. To me, having that full financial package is really the key and then, again from there it’s gonna be some of the factors of the appraisal as well as the title work that would go along with it. But generally speaking, 45 days to close is pretty.
Paul Sian: Reasonable.
Angie Hoffman: Yes.
Paul Sian: You mentioned the documents that was my blog article documents for the conventional mortgage process. You mentioned W2s, 1040, tax returns, that is pretty similar the document requirements for commercial loans that it is for residential space?
Angie Hoffman: Yes. It’s very similar. With the PFS is gonna be one of the biggest as well as the two years of tax returns. Potentially three years depending upon, again the request size. Like you said, I mean, if they’re a W2 income type of employee, then we may need additional pay stubs. like I said, for any client, it could be very different depending again on what their history is. If they’re a business owner, then we may mean some more details but generally speaking, again it would be two to three years of personal business has returns, personal financial statement, and potentially obviously purchase agreement or additional documentation from that side.
Paul Sian: Okay. When it comes to partnership, people coming together, those documents from everybody. Correct?
Angie Hoffman: Correct. So, depending on what the ownership structure is. Generally, if somebody’s over 20% ownership within the property, then we’re going to need that financial information from them as well.
Paul Sian: Okay. I know with the conventional space. Lending into an LLC is generally impossible. Most lenders will not allow conventional borrowers to use an LLC. How does that work on the commercial side?
Angie Hoffman: The vast majority of the lending that I do is going to be through an LLC in a holding company. The clients are still a personal guarantor but the lending itself in the title is all within the LLC.
Paul Sian: Is it a requirement in LLC or is it an option for the buyer?
Angie Hoffman: It’s an option. I mean, one that again depending from an attorney’s perspective, if you’re talking about liability. It may be a best-case scenario to have an LLC with that property. But we always reference stuff talk to your attorney about what makes sense for you.
Paul Sian: How much, do you have any minimum loan requirements and your maximum loan requirement?  
Angie Hoffman: Up to ten million on the investment real estate side, and then once it’s beyond that, we do have a commercial group that we would work with a real estate group as well as our middle marker group that would potentially be involved. As far as minimum typically, again if it’s under 2,50,000. It’s still something that we would do. It just, we pull in a different partner to work with us on that too, because it kind of goes into a little bit different of a space.
Paul Sian: Is there, under 250,000$ or is there a lower minimum. I know some conventional lenders won’t touch anything fifty thousand and under.
Angie Hoffman: It’s pretty common. Yes, under fifty thousand is gonna be a little bit more difficult. 
Paul Sian: 50,000 to 2,50,000, and above that.
Angie Hoffman: But keep in mind too. I mean, if you have properties itself. It may be again, you see this more with the single-family home portfolios. You may have multiple properties that are under fifty thousand. But we’re looking at the entirety of the portfolio, makes a little bit different of a scenario. I would caution that anything that somebody is looking at from the perspective of either total lending amount or even individual property. We’re happy to take a look at it, have an understanding of what you’re looking to do, and if for some reason it’s not something that is in our world necessarily. Again, from an internal and external standpoint. We typically have somebody who I can contact.
Paul Sian: Discussing interest rates from general perspective, everybody’s situation is different and unique. But in terms of paying more, having a lower LTV, 60% LTV rather than 80%. People get themselves a better interest rate or is it generally, can we same and more just depending on credit and history.
Angie Hoffman: So, from an interest rate standpoint, the commercial side is a little bit different. Then maybe the mortgage or lines of credit side, then you then you generally see. Ours is based off of what banks cost the funds are, and then there is a spread that is on top of that. That’s where you get the percent from. Right now, cost of funds are pretty minimal. So, interest rates are extremely competitive. But from that perspective, it doesn’t necessarily factor in the actual loan it saw or the guarantor itself or the property itself.
Paul Sian: So, there’s some risk-based consideration towards interest rates. I guess a little higher risk project is that something you would price a little higher in the interest rate or generally that it’s not considered as much?
Angie Hoffman: No. That’s not considered as much, generally.
Paul Sian: Okay. Great. That’s all the questions I have for you today Angie. Did you have any final thoughts to share with the group?
Angie Hoffman: Sure. One thing I would say is if anybody has any questions about property specific, cash flow, if this property may fit into their portfolio or something that we would look to land up to 80%.I’m happy to partner with anybody on that side as well, and be resource for them. On top of that, I did want to mention that obviously US Bank is across the country. That gives us the ability even, if I’m your contact in Cincinnati to lend out-of-state borrowers.
I’ve worked with quite a few clients obviously from California that are buying in Cincinnati as well Chicago. So, those are people that I’ve worked with quite frequently as well.
Paul Sian: That is perfect. I’ve got a number of out of state clients to. That is one of the biggest challenges that I’ve faced with some local lenders is that they don’t lend to out of state. That’s a great ability to have.
Angie Hoffman: So, the key with in that too is just as I want to mention too. I mean, anytime that scenario comes up. We are happy to discuss it. One of the biggest factors with out-of-state lenders is that we do look for them to be within US bank footprint. So, we are very much on the west coast and Portland, all of those areas. If they’re somewhere you’re not familiar, if we’re within that area, please reach out. Let me know, and I’m happy to take a look.
Paul Sian: Great. Thank you again. I will leave your contact information on my blog post once it gets published live. Thanks again for being on the podcast.
Angie Hoffman: Thanks for having me. 

Source: cincinkyrealestate.com

Here’s What You Need To Know About Becoming A Cosigner

Are you thinking about becoming a cosigner for someone? Have you ever been asked to cosign on a loan before? 

becoming a cosignerMany people have been asked to cosign loans for family members and even friends. However, many people do not understand the full cosigner meaning, and becoming a cosigner is never something you should do unless you completely understand what it means.

If someone asks you to cosign a loan for them, you might be hesitant to say yes at first. You also might not want to offend the person or make them mad.

Whatever you may be thinking, I want you to fully understand what you are getting yourself into.

Becoming a cosigner can actually turn into a big financial mistake if you do it without really thinking it through.

Okay, now some of you may think that I’m a mean person for saying that, but I’ve heard many stories from people who’ve had their credit wrecked, have been stuck paying a loan for someone else, and even had their relationships ruined.

All of that from cosigning a loan.

Perhaps you have cosigned before and it went fine, or you know a friend of a friend who has done it. Perhaps you think that things won’t go bad for you or that you are hurting the person by not cosigning for them.

But, I want you to be careful before becoming a cosigner. I’m saying this to help you!

No matter how well you think you know someone, mixing money and relationships can change things. What you may have thought was a wonderful friendship or family relationship can turn into a nightmare.

It may seem very innocent – you’re just helping a good friend or relative get a loan. 

Really, if it was that simple, I’d tell everyone to do it. But, becoming a cosigner is a major financial decision that you need to seriously think about before agreeing to.

Before you cosign a mortgage or another type of loan for someone, it is always wise to be 100% positive of what cosigning a loan actually means and how it may affect your relationship with the person getting the loan.

Surprisingly, many people don’t know exactly what happens when they agree to being a cosigner. Many people just think that all you’re doing is helping a person get approved, but that’s not just it.

Sorry to break it to you, but the bank, landlord, etc., does not care if the applicant has a friend with a good credit history. 

There’s more that comes with being a cosigner.

As the cosigner, what’s actually happening is that you are taking on the full responsibility of the debt if the original applicant is unable to pay.

And, that happens more often than you might think.

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According to a survey I found on CreditCards.com, 38% of cosigners had to pay some or all of a loan that they cosigned for because the primary borrower failed to pay. This is a HUGE percentage of cosigners, so please keep that in mind.

Other statistics I found about becoming a cosigner include:

  • 28% of cosigners saw a drop in their credit score because the person that they cosigned on a loan for paid their loan late or skipped a payment.
  • 26% of cosigners said that cosigning damaged the relationship with the person that they cosigned a loan for.
  • 90% of private student loan borrowers who applied for cosigner release were rejected. So, if you think that you are going to cosign for a loan and then remove yourself from the loan later, that is much more difficult than you probably think. Stat from Consumer Financial Protection Bureau)

So, who is finding cosigners for loans?

According to the survey mentioned above, 45% of cosigners are cosigning for their child or stepchild. And 21% of cosigners are cosigning for a friend.

The rest is a mixture of cosigning for spouses/partners and parents.

Today, I am going to answer common questions about becoming a cosigner for a loan.

What to know about becoming a cosigner.

 

What is a cosigner?

If you’ve been asked to become a cosigner on a loan, you may not know what that fully entails.

A cosigner is someone who agrees to be on a loan with another person so that they are more likely to be approved. 

A cosigner may be needed for different things such as a:

  • Car loan
  • Student loan
  • Mortgage
  • Apartment or other type of rental home

And more.

Here’s an example of when someone may want a cosigner: if your child wants to buy a car but doesn’t have a long enough credit history to be approved for the car loan. Your child may ask you to cosign their loan so the lender takes your credit score and financial information into account. This improves your child’s chances of being approved.

Other reasons you might be asked to be a cosigner is if the borrower doesn’t have a high enough credit score or doesn’t make enough money to pay the loan (that is a red flag right there).

However, as a cosigner, you are agreeing to pay off the debt if the original borrower is unable to pay it in the future. So, even if the original borrower doesn’t pay a penny, the cosigner would have to make all of the payments or risk being sued, having credit report damage, and more.

In that example I gave, the parent would be responsible for the car loan if their child could no longer make their payments. Not only that, if the child for some reason refused to make payments (I’ve heard of situations like this), the parent would be responsible.

Remember, like I stated above, 38% of cosigners had to pay some or all of a loan that they cosigned for because the primary borrower failed to pay. 

And in some circumstances, even if the borrower files bankruptcy, while their other loans might be discharged, the cosigner may still be responsible for paying the cosigned loan.

Related: Everything You Need To Know About How To Build Your Credit Score

 

How does a co signer work?

Here’s what happens when you agree to become a cosigner for a friend or family member. 

You will start by giving your personal information to the bank or lender. This is information like bank statements, tax returns, paycheck stubs, and so on.

You will also have to complete the loan application, and once you agree with all of the loan terms, then you sign it.

But, becoming a cosigner doesn’t mean that you will own or have partial ownership of the vehicle, house, or whatever else you are cosigning for. It does mean that you are taking full financial responsibility and promising to pay the loan yourself if the borrower does not pay.

Becoming a cosigner is nothing to take lightly.

 

Does cosigning hurt your credit? Is it bad to be a cosigner?

Becoming a cosigner can hurt your credit score and prevent you from future loans in some circumstances.

Here’s why:

  • If the person doesn’t pay the monthly payments on time, then you may be rejected for a loan in the future. Missed payments can damage your credit score and your credit report.
  • As a cosigner, you are increasing your debt-to-income ratio. So, even if your friend/family member pays every single bill on time, a lender will still see this as YOUR debt. Unfortunately, this may prevent them from approving your loan because they will think you have too much debt on your plate.

If you might be buying something soon that will need financing (house, car, etc.), you should think long and hard before you decide to be a cosigner on someone else’s loan.

 

Can cosigning a loan hurt a relationship?

Unfortunately, many cosigning relationships go sour. 

I have heard many stories where someone cosigned a loan for someone else and then didn’t talk to them for years or even decades because of a falling out of some sort.

I have always been a firm believer that money and relationships do not mix well. 

If you are going to cosign or lend money to someone, then you should consider it a gift because there is a chance that you will never see that money again.

 

Can you remove yourself from a loan as a cosigner?

Remember the statistic above – 90% of private student loan borrowers who applied for cosigner release were rejected. 

There’s not much you can do to remove yourself from a loan that you cosigned on. If the person isn’t making payments, you are stuck with it for the most part.

The loan would have to be refinanced to take yourself off the loan, and there are many horror stories out there where the original borrower refused to refinance because then they wouldn’t be able to force the cosigner to continue to pay the monthly bill.

Plus, there are instances in which refinancing is impossible because of the value decreasing, the economy changing, a person’s financial situation getting worse, and so on. 

So, while the original borrower may be okay with getting you off of the loan and refinancing, it’s still up to the lender whether or not they will refinance the loan.

 

How do I protect myself as a cosigner?

There is no guarantee that becoming a cosigner is going to work out, but if you’re determined to do it, you will want to know both of these two things for sure:

  1. That you can trust the person you are cosigning for.
  2. That YOU can make the payment.

Many people who are thinking about becoming a cosigner may not think about that last one, but it is just as important as the first one. Being stuck with the loan payment would be awful, but not being able to make the payment could cause you to go into serious debt and destroy your credit.

You may be certain you won’t be stuck making the payment, but you don’t want to be stuck in a bad financial situation.

 

Should I cosign a loan?

Even though those cosigning horror stories are real cautionary tales, most people don’t believe they would ever happen to them. 

However, don’t you think most (if not all) cosigners felt the same way in the beginning?

It’s up to each person to decide if they will cosign, and you should never feel forced to do it. However, I want you to remember that if you cosign, then you should make sure that you can afford to make the monthly payment.

You never know, one day those payments are being made and everything is going well. The original borrower may be a great person, but then they may lose their job, have an unexpected expense come up, or something else that prevents them from paying their bills.

Then, what if something happens to you and you can’t make those payments either? Unfortunately, being unprepared and not really knowing what you are getting into can turn into a disastrous situation.

Cosigning a loan may not always be bad. However, I believe it’s better to realize what the consequences are before going into something that can negatively impact your life. It’s always better to be prepared!

 

Is it a bad idea to cosign for someone?

Cosigning a loan doesn’t always have to be a bad thing.

However, I want you to remember that there is a chance that you will be on the hook for the loan.

So, if you cosign, whether that be for a car, mortgage, apartment, student loan, or something else, you should make sure that you can afford the payment as well. Because, there is a chance that you may have to pay it one day.

Everyone has a different situation, and ultimately, you have to do what’s right for you. 

What do you think of becoming a cosigner for a mortgage or other type of loan? Would you ever do it?

The post Here’s What You Need To Know About Becoming A Cosigner appeared first on Making Sense Of Cents.

Source: makingsenseofcents.com

Nevada County, California VA Loan Information

Table of Contents

  • What is the VA Loan Limit?
  • How to Apply for a VA Home Loan?
  • What is the Median Home Price?
  • What are the VA Appraisal Fees?
  • Do I need Flood Insurance?
  • How do I learn about Property Taxes?
  • What is the Population?
  • What are the major cities?
  • About Nevada County
  • Veteran Information
  • Apply for a VA Home Loan
  • VA Approved Condos

FAQ

What is the VA Loan Limit?

2021 VA Home Loan Limit: $0 down up to $5,000,000* (Subject to lender limits) /2 open VA loans at one time $548,250* (Call 888-573-4496 for details).

How to Apply for a VA Home Loan?

This is a quick look at how to apply for a VA home loan in Nevada County. For a more detailed overview of the VA home loan process, check out our complete guide on how to apply for a VA home loan. Here, we’ll go over the general steps to getting a VA home loan and point out some things to pay attention to in Nevada County. If you have any questions, you can call us at VA HLC and we’ll help you get started.

  1. Get your Certificate of Eligibility (COE)
    • Give us a call at (877) 432-5626 and we’ll get your COE for you.
  2. Are you applying for a refinance loan? Check out our complete guide to VA Refinancing.
  3. Get pre-approved, to get pre-approved for a loan, you’ll need:
    • Previous two years of W2s
    • Most recent 30 days paystubs or LES (active duty)
    • Most recent 60 days bank statements
    • Landlord and HR/Payroll Department contact info
  4. Find a home
    • We can help you check whether the home is in one of the Nevada County flood zones
  5. Get the necessary inspections
    • Termite inspection: required
    • Well or septic inspections needed, if applicable
  6. Get the home appraised
    • We can help you find a VA-Certified appraiser in Nevada County and schedule the process
    • Construction loan note: Construction permit/appraisal info
      1. Building permit
      2. Elevation certificate
  7. Lock-in your interest rates
    • Wait until the appraisal to lock-in your loan rates. If it turns out you need to make repairs, it can push your closing back. Then you can get stuck paying rate extension fees.
  8. Close the deal and get packing!
    • You’re ready to go.

What is the Median Home Price?

As of March 31st, 2020, the median home value for Nevada County is $477,219. In addition, the median household income for residents of the county is $63,240.

How much are the VA Appraisal Fees?

  • Single-Family: $600.
  • Individual Condo: $600.
  • Manufactured Homes: $600.
  • 2-4 Unit Multi-Family: $850.
  • Appraisal Turnaround Times: 7 days.

Do I need Flood Insurance?

  • The VA requires properties are required to have flood insurance if they are in a Special Flood Hazard Area.
  • In Nevada county, the mountainous terrain reduces flood hazard areas to small areas surrounding bodies of water.

How do I learn about Property Taxes?

  • Sue Home is the Nevada county tax assessor. Her office can be reached at 905 Maidu Avenue Suite 290 Nevada City, California 95959. In addition, her office can also be reached by calling 530-265-1232.
  • The state of California offers various incentive programs that expand statewide for new, growing, and relocating businesses. Two of these programs are California Competes Tax Credit which offers qualifying businesses tax credit and the New employment Credit program which offers a tax credit for taxpayers who hire full-time employees. These and many other programs help in further diversifying the state’s economy.

What is the Population?

  • The county’s population of 99,755 is 84% White, 9% Hispanic, and 3% two or more races.
  • Most county residents are between 18 and 65 years old, with 17% under 18 years old and 28% older than 65.
  • In total, the county has about 40,904 households, at an average of two people per household.

What are the major cities?

The county has two cities and one town, including Nevada City which serves as the county seat. The two other cities in the county are Grass Valley and Truckee.

About Nevada County

Formed in 1851, 13 years prior to the neighboring state of Nevada attaining statehood, Nevada County was actually the first area of the United States to include the stand-alone word Nevada in its name. The term’s etymology is from the name the Sierra Nevada, Spanish for snow-covered. Nevada County is known for its involvement in the California Gold Rush. The early years of California are featured prominently throughout the county. The Nevada Theatre, built in 1865 making it the oldest theater in the state continues to operate to this day. Many notable figures have performed on the stage at the Nevada Theatre, ranging from Mark Twain to Motley Crue.

Further providing Nevada County notoriety is its place as the birthplace of Arcade Video games, with the inception of Pong. The creation of Pong led to the county being nicknamed the “Silicon Valley of the Sierras.” The first cell phone for commercial usage, with the capability of taking photos, was developed in the county seat of Nevada City. Currently, over 1,000 software designers and developers reside in the county.

Our nation’s 31st President, Herbert Hoover once lived in Nevada City, earning a living as a miner, fresh out of Stanford University.

The timber industry, government services, and tourism are the driving forces of the local economy.

Tourism based on the history of this country is reflected in many of the museums found in Nevada County. These museums put the history of the Gold Rush, mining, and the railroad at the forefront. The county is also home to numerous state parks including Malakoff Diggins State Historic Park, Grass Valley’s Empire Mine State Historic Park, and Donner Memorial State Park.

A veteran property tax exemption exists for veteran homeowners in Nevada County, amounting to $4,000. A disabled veterans exemption which is for a far greater monetary sum is accessible for disabled veterans with a total disability, blindness or the loss of use of more than one limb. This exemption is also available for the surviving spouses of disabled veterans.

Veteran Information

The county is currently home to 8,319 veterans, and they all have access to:

  • Nevada County is home to one VFW post:
    • Post-2655 Banner Mountian: 415 North Pine Street, Nevada City, CA 95959.
  • County Veteran Assistance Information
    • Nevada County Veteran Services Office: 988 McCourtney Road Grass Valley, CA 95949.

Apply for a VA Home Loan

  • For more information about VA Home Loans and how to apply, click here.
  • If you meet the VA’s eligibility requirements, you will be able to enjoy some of the best government guaranteed home loans available.  
  • VA loans can finance the construction of a property. However, the property must be owned and prepared for construction as the VA cannot ensure vacant land loans.

VA Approved Condos

Name (ID): THE BOULDERS (000151)
Address: 
10844 CINNABAR WAY
TRUCKEE CA 96161
NEVADA
Status: Accepted Without Conditions
Request Received Date: 05/13/2015
Review Completion Date: 06/02/2015

Oregon VA Loan Information: https://www.vahomeloancenters.org/oregon-va-home-loan-limits/

VA Loan Information by State: https://www.vahomeloancenters.org/va-loan-limit-maximum-va-loan-amount/

The post Nevada County, California VA Loan Information appeared first on VA Home Loan Centers.

Source: vahomeloancenters.org

5 Key Property Features When House Hunting

5 Key Property Features When House Hunting

When shopping for a home, many of us know our basic focal points, such as identifying the right neighborhood or finding a house with the ideal number of bedrooms and bathrooms. These factors are important, but there are other home features (some very large and some very small) that can greatly contribute to the enjoyment of your new home. Let’s make sure you don’t miss any of them.

Here are five opportunities to maximize the benefits of your purchase that go beyond just the house and why each one deserves your consideration.

click to enlarge

Home Buying Consideration #1: The Garage

Garages are a very important feature for many homebuyers, and can even end up being a dealbreaker for some buyers. More than a parking spot, garages provide valuable storage and project space, as well as a way to protect your vehicles from all types of damage. When you are first shopping for a home, you may know that you want a garage, but you may not have considered all of the variables that go into the garage design, and which choice is right for you.

Garage Design: Why it Matters

When evaluating garage design, it’s important to start by considering what you may want to use the space for, and what external factors (such as weather) might impact your use. Here are several major garage design aspects to keep in mind as you house hunt.

Rental space: Depending on the size and layout of your garage, is there space that could be rented out full time, or used as a short-term rental to generate additional income? That extra income could be directed towards your mortgage payment.

Storage opportunities: Does the garage have room to store what you need to reduce in-home clutter? Is there space for shelves, or even room in the rafters?

Potential property value increase: According to the sales comparison approach (SCA), one of the most recognizable forms of valuing residential real estate, a “finished” garage that feels like an extension of the home’s indoor living space is one of several features that can increase overall home value. You may also want to consider the possibilities of eventually remodeling a bland garage in an otherwise perfect home.

Attached vs. Detached Garages: Pros vs. Cons

One of the biggest distinctions in garage design is whether a garage is attached or detached. Often influenced by lot shape (narrow lots on an alley often have detached garages, wider lots with a driveway often have attached garages) or the age of a home, having a detached or attached garage has both advantages and disadvantages.  

Attached Garages: Pros

  • Convenient access to your cars, storage, and other items, particularly if you live in an area with an extreme climate 
  • Attached garages are often less expensive to build, and can be climate controlled by accessing the electrical and HVAC systems that are part of the home
  • As attached garages are the most popular type of garage, having one typically increases the value of your home

Attached Garages: Cons

  • If you’re thinking of adding one, it may not be possible to fit on a narrow, urban lot
  • Since they offer direct access to the home, they can be a security and fire risk  
  • They can be hard to add onto or expand, and any additions or changes might require more expensive permits and extensive inspections
  • Adding an attached garage, particularly to a vintage home, may look strange or otherwise detract from the exterior look of the home
  • Noisy garage activities may be heard more inside the home

Detached Garages: Pros

  • More flexibility in size, layout and location, lot size and shape permitting
  • It’s easier to add room for cars, storage, and projects, and to add onto if needed
  • Less fire and security risk to your home 
  • Less of an impact to the look or curb appeal of your home
  • Can increase the resale value of your home

Detached Garages: Cons 

  • Particularly in bad weather, less convenient in terms of access 
  • Will require separate utilities, HVAC, and more
  • May not be allowed by your HOA or city permitting office

Now that we’ve examined the garage, let’s take a look at another key feature — what’s going on with the front and backyard?

Home Buying Consideration #2: The Yard

No longer limited to just a lawn, yards have now become an extension of the home. A convenient, well-designed outdoor living space is something that many homeowners desire. Yards can be great spaces for entertaining and are often much less expensive to create than comparable indoor entertaining spaces. Here are some important yard elements to consider. 

Trees and landscaping: Important for both aesthetic and practical reasons, trees and landscaping can increase your yard’s appeal. A mature, well-designed landscape is valuable, as it represents an investment of both time and money. 

Outdoor kitchen: Whether you are grilling for two or entertaining 200, an outdoor kitchen makes cooking fun and convenient. 

Fireplace or fire pit: This stylish focal point makes it easy to keep enjoying your yard, even after dark or in cooler weather. 

Automatic sprinklers, drip system, and misting system: Automatic sprinklers and drip systems can keep your yard looking lush for a low cost, and are particularly valuable in dry climates. Misting systems can also keep you cool on hot days. 

Deck or Patio: A stylish outdoor surface makes it easy to enjoy your yard, and many new construction materials require little to no maintenance. 

Shed: Well-designed sheds can go beyond storage, offering everything from a private workspace to extra space for guests to sleep. 

So, you’re considering the finer points of a yard. But what about adding a body of water to that yard for cooling off on hot days? Here’s the pros and cons of investing in a water element for your next home.

Just starting your home search? Here’s the best time to begin.

Home Buying Consideration #3: The Pool

Pools and hot tubs are perhaps the most controversial of all outdoor home features. Some homebuyers totally avoid them, and some won’t look at a house without them. Which side are you on? Here are some factors to consider. 

Backyard Pool and Hot Tub: Pros 

  • Pools and hot tubs can be aesthetically pleasing
  • Both are also useful for entertaining
  • In warmer climates, pools can provide a way to enjoy the outdoors comfortably
  • If you like to swim, engage in other aquatic exercises regularly for fitness, or use a hot tub for muscle and joint pain, having your own can be convenient
  • In hot climates where pools are common (i.e., Arizona, California, Florida), having a pool can significantly increase the resale value of your home 

Backyard Pool and Hot Tub: Cons

  • Both pools and hot tubs require regular maintenance that includes chemicals, cleaning, and repair
  • Many families with small children do not want a pool at home due to safety concerns
  • Your insurance cost may be higher, and your utility bills may go up as well, particularly for heating a pool 
  • When it is time to sell your home, there are many buyers who will not want a house with a pool

A pool is a big decision that comes with both maintenance and benefits alike. You can always opt for a different kind of water feature, like a backyard stream. But if you’re looking to streamline your life, investing in home tech devices is almost a no-brainer.

Home Buying Consideration #4: The Appliances and Tech Gadgets

As technology improves and designs continually evolve, having up-to-date appliances and other devices in your home has become increasingly important. For example, while attractive kitchens are near the top of many house-hunters’ wish lists, there are items within those kitchens that can help — and items that can hurt — when it comes to increasing a home’s value.

Appliances That Can Help Property Value

Commercial-grade appliances: Particularly in high-end properties, many buyers expect to see appliances from luxury or professional brands. 

Smart devices: Thermostats, fire detectors, carbon monoxide detectors, security cameras, door locks, and doorbells are just a few of the relatively new smart home devices that homebuyers are now beginning to appreciate and even expect.

Appliances That Can Hurt Property Value

Old and energy inefficient: These power-sucking products will cost you in both your utility bill, and the resale value of your home. 

Homes totally lacking certain appliances: Is your property missing a dishwasher, indoor laundry, or other key features? This can be a major turn-off for buyers who don’t want to have to complete a complicated remodeling and installation project. 

Mismatched appliances: Appliances from different eras or in different colors can make your kitchen look unfinished and low-quality, even if your other finishes are fantastic.

Looking to stock up on home amenities? We’ve targeted the seasonal best deals for doing so.

Now that you’ve considered the key interior and exterior components of your dream home, there’s one last important element to contemplate: the driveway.

Home Buying Consideration #5: The Driveway

Walkways and driveways connect your home to the outside world and play a crucial role in the curb appeal of your residence. Although often overlooked, they are important home features that can be messy and expensive to replace or update. 

If you are evaluating the driveway at a potential home, or considering an update at your current home, the first choice you will need to make is whether you want asphalt or concrete. Both have benefits and drawbacks that may vary depending on your climate, landscape, and usage needs.

Today, many homeowners and buyers are also looking for something beyond the basics, with driveway design trends including elaborate paving materials, irregular shapes, and additional features like extra parking for guests.

Know the Tricks, Now Land the House

Although these five features may not be your first considerations in the house-hunting process, they are important elements that you will use or interact with nearly every day. Add them to your consideration list, and you will be sure to end up in a customized home that you enjoy and treasure. If you’ve found your ideal home with all the right features, reach out to a PennyMac Loan Officer today or apply online to get pre-approved for the loan that’s right for you.

Source: pennymacusa.com

Benton County, Oregon VA Loan Information

Table of Contents

  • What is the VA Loan Limit?
  • How to Apply for a VA Home Loan?
  • What is the Median Home Price?
  • What are the VA Appraisal Fees?
  • Do I need Flood Insurance?
  • How do I learn about Property Taxes?
  • What is the Population?
  • What are the major cities?
  • About Benton County
  • Veteran Information
  • Apply for a VA Home Loan
  • VA Approved Condos

FAQ

What is the VA Loan Limit?

2021 VA Home Loan Limit: $0 down payment up to $5,000,000* (subject to lender limits) /2 open VA loans at one time $548,250 (Call 877-432-5626 for details).

How to Apply for a VA Home Loan?

This is a quick look at how to apply for a VA home loan in Benton county. For a more detailed overview of the VA home loan process, check out our complete guide on how to apply for a VA home loan. Here, we’ll go over the general steps to getting a VA home loan and point out some things to pay attention to in Benton County. If you have any questions, you can call us at VA HLC and we’ll help you get started.

  1. Get your Certificate of Eligibility (COE)
    • Give us a call at (877) 432-5626 and we’ll get your COE for you.
  2. Are you applying for a refinance loan? Check out our complete guide to VA Refinancing.
  3. Get pre-approved, to get pre-approved for a loan, you’ll need:
    • Previous two years of W2s
    • Most recent 30 days paystubs or LES (active duty)
    • Most recent 60 days bank statements
    • Landlord and HR/Payroll Department contact info
  4. Find a home
    • We can help you check whether the home is in one of the Benton County flood zones
  5. Get the necessary inspections
    • Termite inspection: required
    • Well or septic inspections needed, if applicable
  6. Get the home appraised
    • We can help you find a VA-Certified appraiser in Benton County and schedule the process
    • Construction loan note: Construction permit/appraisal info
      1. Building permit
      2. Elevation certificate
  7. Lock-in your interest rates
    • Pro tip: Wait until the appraisal to lock-in your loan rates. If it turns out you need to make repairs, it can push your closing back. Then you can get stuck paying rate extension fees.
  8. Close the deal and get packing!
    • You’re ready to go.

What is the Median Home Price?

As of August 31st, 2020, the median home value for Benton County is $385,002. In addition, the median household income for residents of the county is $58,655.

How much are the VA Appraisal Fees?

  • Single-Family: $775.
  • Individual Condo: $825.
  • Manufactured Homes: $825.
  • 2-4 Unit Multi-Family: $950.
  • Appraisal Turnaround Times: 10 days.

Do I need Flood Insurance?

  • The VA requires properties are required to have flood insurance if they are in a Special Flood Hazard Area.
  • In Benton County, most flood hazard areas are located along the Willamette River which borders the county to the east. Several other creeks within the county are also prone to flooding. However, one of the most significant flood hazard areas is Marys River which floods areas within the city of Corvallis.

How do I learn about Property Taxes?

  • The Benton county tax assessor’s office is located at 4077 S.W. Research Way Corvallis, Oregon, 97333. In addition, the office can also be reached by calling (541) 766-6855
  • Oregon offers businesses that invest and hire within enterprise zones the option to be exempt from property taxes for at least three years. In addition, the Oregon Investment Advantage encourages new businesses to start and relocating to the state. For example, the program offers income tax subtraction, and it can also eliminate state income liability for new businesses for many years.

What is the Population?

  • The county’s population of 93,053 is 79% White, 7% Hispanic, and 7% Asian.
  • Most county residents are between 18 and 65 years old, with 16% under 18 years old and 17% older than 65.
  • In total, the county has about 35,056 households, at an average of two people per household.

What are the major cities?

The county has five cities, including the city of Corvallis, which serves as the county seat. In addition, there are four other cities Adair Village, Albany, Monroe, and Philomath.

About Benton County

Benton County is located in western Oregon and is home to a friendly local community and excellent dining options. Fun in the Oregon wilderness is waiting at any of the beautiful outdoor spots in the county. Many fun and interesting attractions can be found all over the area, including museums, art galleries, golf courses, and much more. Don’t miss out on any of the exciting festivals held in the county, where you can truly celebrate like a local! Benton County was officially founded on December 23, 1847, and was named after Thomas Hart Benton, who served as a U.S. Senator. The current population of the county is 90,951.

Enjoy all the beauty of the Oregon landscape at any of the scenic outdoor spots in Benton County. The E.E. Wilson Wildlife Area is the perfect place to get away from it all, featuring beautiful hiking trails and scenic campsites. For some of the best hiking and rock-climbing opportunities, be sure to check out Mary’s Peak, which offers majestic lookout points. Bring your friends and family to Riverfront Commemorative Park, which features walking paths, picnic areas, and much more. Other scenic outdoor spots in the county include the Alsea Falls Recreation Site and the Beazell Memorial Forest.

A great time is waiting at any of the amazing attractions in Benton County. The Arts Center is a can’t-miss for art-lovers, featuring a huge variety of paintings and sculptures made by talented artists. The Arts Center also hosts workshops, rotating exhibits, and special events. If you are interested in local history, then be sure to visit all the amazing exhibits and artifacts housed within the County Historical Museum. Check out the beautiful Darkside Cinema, which is independently owned and showcases both independent and art films. Other great attractions in the county include the Majestic Theater, Art in the Valley, and the LaSells Stewart Center.

A fun time for the whole family is waiting at all the exciting events held in Benton County. The County Fair and Rodeo bring out most of the local community to enjoy carnival rides, fun games, and delicious local food. Try a multitude of delicious drinks at Corvallis Beer Week. Other great events held in the county include the Corvallis Fall Festival and the Red Blue and Riverfront Festival.

Veteran Information

There are about 5,249 veterans currently living within Benton County, which offers assistance to veterans through:

Benton County is home to one VFW post:

  • Post 3957 Monroe Post – 605 Main Street, Monroe, Oregon 97456.

VA Medical Centers in the county:

  • Benton County VSO – 777 NW 9th Street, Suite 202, Corvallis, Oregon 97330.
  •  

VA Home Loan Information

  • For more information about VA Home Loans and how to apply, click here.
  • If you meet the VA’s eligibility requirements, you will be able to enjoy some of the best government guaranteed home loans available.  
  • VA loans can finance the construction of a property. However, the property must be owned and prepared for construction as the VA cannot ensure vacant land loans.

VA Approved Condos

There are currently no VA approved condos in Benton County, Oregon. However, if you’re interested in getting a condo through the approval process give us a call at (877) 432-5626. We can help you through the condo approval process.   

Oregon VA Loan Information: https://www.vahomeloancenters.org/oregon-va-home-loan-limits/

VA Loan Information by State: https://www.vahomeloancenters.org/va-loan-limit-maximum-va-loan-amount/

The post Benton County, Oregon VA Loan Information appeared first on VA Home Loan Centers.

Source: vahomeloancenters.org

A Parent’s Guide to Setting a Successful Budget for a College Student

The post A Parent’s Guide to Setting a Successful Budget for a College Student appeared first on Penny Pinchin' Mom.

 You are getting ready to send your child off to college. Before you start helping them pack their belongings, there is one thing you need to do.

You need to help them create a budget. You need to teach them how to manage their money so they can learn the tools they’ll use long after they graduate.

WHY DO COLLEGE STUDENTS NEED A BUDGET?

The truth is everyone needs a budget. It does not matter your age. If you are dealing with money, a budget is necessary.

  1. Allows you to control your money. Rather than your money telling you what it wants to do, you get to tell your money where it needs to go. You are always in control when you have a budget.
  2. It teaches financial skills. A budget helps ensure that expenses such as rent, tuition, food, insurance, transportation, and housing are paid – before spending money on the fun stuff. (It also helps to make sure you don’t spend more than you make.)
  3. Makes you aware of where your money goes. When you use a budget, you see how you spend. It is very simple to see if too much is going toward dining out when you should be building your savings.
  4. Helps you track your goals. You need to cover expenses but you should also work on building savings at the same time. Your budget allows you to not only see those goals but track them in real time.

DOESN’T A BUDGET MEAN YOU CAN’T HAVE FUN?

Not at all! If anything, your budget will allow you to have guilt-free fun.

For example, the budget may allow you to spend $50 a week dining out. That means you can go to dinner with friends once (possibly twice) a week and enjoy yourself. You won’t be left wondering how you are now going to make rent.

WHAT TYPE OF BUDGET SHOULD YOUR STUDENT USE?

There are various methods of budgeting such as the 50/30/20 and the zero-based budget. For most college students, the zero-based is the simplest and easiest to follow.

The reason is that you track everything. You give every penny a job. That means if you earn $1,500 for the month that you “spend” the entire $1,500.

You will first cover the needs (food, shelter, transportation) and then your wants. If there is money “leftover” after this is done, it can be added to your savings.

You can use other types but if you have never budgeted before, using this method is the simplest.

WHAT SHOULD A COLLEGE STUDENT INCLUDE IN A BUDGET?

The budget will vary for each person, as the income and expense will be different. However, these are the most common categories that need to be included in a budget:

  • Rent
  • Renter’s insurance
  • Car payment
  • Car insurance (also saving for annual renewal fees)
  • Food
  • Clothes
  • Utilities (phone, electricity, gas, water, etc.)
  • Tuition
  • Fees
  • Entertainment (movies, games, concerts)
  • Dining out
  • Emergency fund savings

Again, you may have items that are not included above or see some that you do not need.

However, the most important thing of all is that every penny is given a job. Account for everything you will spend each month so you never have too much month and not enough money.

HOW DO YOU KEEP TRACK OF YOUR BUDGET?

For most college students, apps or digital trackers are the best options.  But, before you rush and sign up, keep the following in mind.

  1. Cost. Many apps are free and they will work perfectly fine. Other apps have a monthly fee attached to them. If you plan to use one of them, make sure you include that as one of your regular expenses. However, do not let the cost alone be a single factor when it comes to clicking the sign-up button.
  2. Security. Your security trumps all else. You need to make sure the app uses encryption as well as two-factor authorization.

Some of the best apps include:

  • Mint
  • You Need a Budget (YNAB)
  • PocketGuard
  • Mvelopes

However, your student may also like the traditional paper and pencil method – and that is OK as well.

Find the right one that works best for your student. That is all that matters.

TEACHING THEM TO BUDGET

Knowing you need a budget and where to track it is just the beginning. You need to teach your child how to budget.

Start by looking at each category that they need on their budget. You may already know the cost for each category but if not, you may need to make phone calls or do research to know.

For example, you know the rent for the apartment is $850 a month but how much are the average utilities? Ask the manager for these costs so you can include them in the budget.

Next, decide how much they want to allow themselves to spend on food. Show them how much a meal costs for a single person at each restaurant you eat at so they can create an average.

You will then have them decide how much “fun money” they want to include as well. You can base this on them wanting to go to the movies two times a month, one concert a month, or attending three events.

Now you can see the expenses for your student. Add their income to the budget and deduct the expenses. They will see if they are operating in the black (money left over) or in the red (spending more than they make).

Show them how to adjust the numbers by increasing their savings or lowering the amount they can spend on clothes – until the budget equals zero. Zero meaning they are spending every penny they earn.

And making them keep track now will help ensure they stay on track well into the future.

 

 

 

The post A Parent’s Guide to Setting a Successful Budget for a College Student appeared first on Penny Pinchin' Mom.

Source: pennypinchinmom.com