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TheShineNSB posted:Unfortunately, standard homeowners insurance policies don't cover earthquake damage without the earthquake endorsement. Even an open perils policy (aka "all risk," a term that I hate and always clarify with my customers) specifically excludes it. Look for "Earth movement" in the Exclusions part of Section 1. If you let me know what policy form she has (in the corner of the page, most likely starts with "HO") then I point you toward the language. Why is it that a typical home owners policy doesn't cover stuff like that or flood damage? Shouldn't the insurance company be able to figure out that an area is at risk for disasters X, Y, and Z, and price accordingly?
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Aug 26, 2011 16:58
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FISHMANPET posted:Why is it that a typical home owners policy doesn't cover stuff like that or flood damage? Shouldn't the insurance company be able to figure out that an area is at risk for disasters X, Y, and Z, and price accordingly? If they included those by default, or even made a hard sell for them, we'd probably complain about our high premiums and the fear-mongering high-pressure sales tactics.
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Aug 26, 2011 17:15
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Those kinds of disasters tend to be heavily clustered, so all the policies will tend to pay out at the same time. A local insurance company isn't going to be able to keep the cash on hand needed for that, so they don't cover it.
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Aug 26, 2011 17:15
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The thing is, though, people who live in areas that aren't on the Pacific Ring of Fire tend not to think about needing earthquake insurance. It could be a century between even fairly minor quakes. Flood insurance is different. If your house is on high ground, you probably don't need it; if it's on low ground, you can usually find flood-plain/frequency maps that tell you if you're at risk, and buy insurance accordingly. On the other hand, building codes tend not to be earthquake-resistant either. There's a reason there's basically no brick houses in California. So while earthquake insurance should be fairly cheap for people east of (say) the rockies, in the event there is a quake, far more buildings will have far more damage. Personally I think this kind of scenario is ripe for government coverage instead. People just aren't good at preparing for disasters that happen ~once every century or less. Expecting them to insure against that kind of risk - and leaving them out to dry if they fail to - is not very reasonable. Anyway leaving all that aside, keep in mind that even here in California, affordable earthquake insurance means a catastrophic policy only. E.g., 25% deductible. So minor damage from a quake isn't going to be worth making a claim for anyway. If my house is destroyed by a quake, I'll be alright - if I just had chimney damage, I'd probably be out of pocket on it. I dunno if it'd be the same for an earthquake endorsement back east or not.
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Aug 26, 2011 19:06
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Here in VA earthquake deductible is typically 2%. On my $225,000 home the earthquake rider is like $30 a year.
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Aug 26, 2011 19:19
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My house is a quarter mile from a substantial fault line which is somewhat overdue for a major earthquake. My catastrophic policy, based on the replacement cost of my house (~180k if I remember right) costs about $600 a year. That was drastically lower than most of the other quotes I got, many of which were double what my homeowners' policy cost. I guess GeoVera Insurance really wanted policyholders in my area or something, I dunno.
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Aug 26, 2011 21:04
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FISHMANPET posted:Why is it that a typical home owners policy doesn't cover stuff like that or flood damage? Shouldn't the insurance company be able to figure out that an area is at risk for disasters X, Y, and Z, and price accordingly? Because things like earthquakes and floods, when they do happen, affect a lot of people and are very expensive. So, if you want to ensure you are covered for that, you have to purchase a separate rider for your insurance. If homeowner's policies did cover that as a standard thing, everyone would be paying much, much more than they are now for homeowners insurance.
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Aug 26, 2011 23:02
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Tricky Ed posted:At 4.5% on a mortgage that starts next month, you'll have $10,000 in equity in November 2016. You'll get up to 20% equity in just over ten years. You'll have paid $45,311.21 in interest during that period. You'd better love this condo, because you won't be able to afford to move out of it, even if the market doesn't drop. My loan is 3.70%. I'm gonna be honest, I dont 'get' the equity part. Do you mean that because I'm paying interest even if I sell it at the price I bought it at it will be at a loss? How would that make it unaffordable to move out?
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Aug 27, 2011 00:07
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FISHMANPET posted:Why is it that a typical home owners policy doesn't cover stuff like that or flood damage? Shouldn't the insurance company be able to figure out that an area is at risk for disasters X, Y, and Z, and price accordingly? Flood insurance in particular has been effectively nationalized. The companies can market and sell the policies with their branding, but the rates, coverage, and policy language are all fixed by the government. By law, they can not include flood coverage in your standard homeowner's policy, only a FEMA flood policy.
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Aug 27, 2011 16:10
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Pram posted:My loan is 3.70%. I'm gonna be honest, I dont 'get' the equity part. Do you mean that because I'm paying interest even if I sell it at the price I bought it at it will be at a loss? How would that make it unaffordable to move out? Here's the problem with buying a home with no money down. You pay $110K for a home. When you go to sell it, you'll find that it costs 5% to 6% of the price of the home in realtor fees, plus 2% in property taxes, plus more money for closing costs, and before you can sell you'll probably have to repaint and replace the carpet and fix things. By the time the sale goes through, it will probably cost you 10% of the value of the home to sell it. So to sell your $110K house will cost you $11,000. If you don't have $11,000, you can't sell it, unless you have equity in the house. Equity essentially means that your loan would be less than the value of the house. In other words, if you had a $80K loan on a $110K home, you would have $30K in equity on it, and you'd be able to sell it. But since you put no money down when you bought it, you have a $110K loan on a $110K home, which means you can't sell it, unless you have $11,000 in the bank waiting to pay all those realtor fees and closing costs and taxes. Now, as time goes on, you will be slowly paying off the loan; it will be dropping every year. But in the beginning, it won't be dropping very much, and it might take you 5 years before you finally have $11K in equity in the home, allowing you to sell it. (Unless the price of houses goes up. Which won't be happening any time soon)
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Aug 28, 2011 05:55
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sheri posted:Because things like earthquakes and floods, when they do happen, affect a lot of people and are very expensive. So, if you want to ensure you are covered for that, you have to purchase a separate rider for your insurance. If homeowner's policies did cover that as a standard thing, everyone would be paying much, much more than they are now for homeowners insurance. Yeah, but if it does happen, and the homeowner hasn't gotten that coverage, they're hosed. So shouldn't we be really sure that everybody has coverage for these huge catastrophic disasters. Is flood and earthquake insurance subsidized by the government? I see the Federal government is involved in flood, and the state of California has their hand in earthquake insurance there. I can't tell if the government provides a subsidy to the flood program or not, and California says it doesn't contribute any money. So if it can pay for itself as is, why not make everybody pay for it with their homeowners policy?
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Aug 28, 2011 07:40
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Every now and then, I think people need a reminder of the subtitle for this thread, so... I'm sure many of you have heard about this hurricane thing, Irene I think. Well, I'm not in a mandatory evacuation situation in the middle of NJ, but boy, when you get lots of rain in a short period of time and the "even ground" area around the house seems more like "slightly graded towards one side" and that gutter you meant to clean out during a dry weekend got put off so the runoff is creating a nice cascade towards that slope on the ground, you might just get a little water seepage in the basement. Oh, and the sump pump decides to clog at a really nice time. On the plus side, that's not the side we have everything stored. Just the washer and dryer. DO. NEVER. BUY.
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Aug 28, 2011 13:44
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FISHMANPET posted:Yeah, but if it does happen, and the homeowner hasn't gotten that coverage, they're hosed. So shouldn't we be really sure that everybody has coverage for these huge catastrophic disasters. In certain ways, it would make sense for this to be a "universal catastrophe insurance" thing done by the government, but there are a few major problems - 1) Not everyone owns property or owns their own home. If something like this came out of general tax revenues, that would be hugely regressive. 2) Not every state has common natural disasters (or any). There's an argument to be made that someone choosing to buy land in California implicitly accepts the risk/cost of The Big One. Much better to just do what we're doing now - regulate the insurance policies that do exist.
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Aug 28, 2011 17:07
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lapse posted:In certain ways, it would make sense for this to be a "universal catastrophe insurance" thing done by the government, but there are a few major problems - What he said. And I think the NFIP has some major issues as well(due to underfunding/not charging homeowners enough to cover the risk).
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Aug 28, 2011 17:18
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Do any of you have experience with half basements? The one i'm in negotiations on is only 4' tall and i'm not sure what good it is except for being a REALLY big place for a sump pump.
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Aug 28, 2011 17:22
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Buying a house in my city is absolutely insane. We finally are in contingency on a nice place after putting offers in on 4 different houses, and getting beaten. First house we ever looked at for example, was listed for $299k, the seller was there and disclosed to our realtor that there were 3 cash offers around the $350k range. After that, we went to go see a house 3 hours after it became available to view. By the time we got home? 6 Cash offers, all over list. Incredibly stiff competition here, mostly from investors looking to flip and rent. Only reason we were able to get into contract on this house is because it was one of the few non-foreclosures we saw, and our offer of listing price was presented to the owners almost immediately. Offers higher than ours rolled in within a half hour of them accepting ours. But drive 30 miles south and you have towns where the houses languish on the market for hundreds of days. That's what we get for living in a tourist destination, I guess. The house is fantastic though, and we can actually afford it. So now we just have to convince the bank of that fact.
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Aug 29, 2011 17:28
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Flood Insurance is only provide by the Government via The National Flood Insurance Program (NFIP).
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Aug 29, 2011 18:55
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ixo posted:Buying a house in my city is absolutely insane. We finally are in contingency on a nice place after putting offers in on 4 different houses, and getting beaten. First house we ever looked at for example, was listed for $299k, the seller was there and disclosed to our realtor that there were 3 cash offers around the $350k range. After that, we went to go see a house 3 hours after it became available to view. By the time we got home? 6 Cash offers, all over list. Incredibly stiff competition here, mostly from investors looking to flip and rent. How can you go on about how much of a market anomaly your town is, and a tourist attraction, and not give a hint as to where you live?
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Aug 30, 2011 01:23
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Leperflesh posted:As a buyer, you can make any offer you drat well please. You are not under any obligation, ever, to be "nice" to the seller by meeting their unrealistic expectations. That includes both ordinary sales, and REOs. Should fixer-uppers be avoided? I currently pay $715 in rent for a very new ~580sqft studio (normal for the area I live in, Dane County, WI) but am exploring getting a house. The money I pay in rent could get me about a $100k ~ $120k loan but unfortunately in my area that only gets a smaller/older home that would need some sort of work. There is one house that is going for $87k but needs some roof work and has a water leak in the basement. It is an older house (1968) and there are some other areas that could use updating like the appliances, HVAC, and water heater/softner. After talking with the agent it sounds like the owners weren't keeping up with routine maintenance like they should have, not that the house was flawed to start. The agent also let me know that this is a short sale so basically the listed price, which hasn't been lowered since March '11, is the only offer the bank will take? After looking at houses for a couple months it almost looks like buying a home is out of the question for me for several years. Also, what is the opinion on renting out unused bedrooms while still living in the same house? You open yourself to potential renter issues but at least you can get some money back to help bay off bills/loans. Stats: Salary: $40k/year Monthly take home pay: ~ $2,100 Savings: Over $15k Time at job: coming up on four years. Total monthly bills: ~ $250 Debt: only a student loan @ $250/month with five years left. Relationship status: single MH Knights fucked around with this message at 16:31 on Sep 1, 2011 |
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Aug 30, 2011 01:36
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MH Knights posted:Should fixer-uppers be avoided? I currently pay $715 in rent for a very new ~580sqft studio (normal for the area I live in, Dane County, WI) but am exploring getting a house. The money I pay in rent could get me about a $100k ~ $120k loan but unfortunately in my area that only gets a smaller/older home that would need some sort of work. Don't buy fixer-uppers unless 1. you have cash money in the bank for said fixes and 2. you're handy (or are willing to shell out for a contractor).
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Aug 30, 2011 02:00
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daslog posted:Flood Insurance is only provide by the Government via The National Flood Insurance Program (NFIP).
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Aug 30, 2011 02:11
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senor punk posted:How can you go on about how much of a market anomaly your town is, and a tourist attraction, and not give a hint as to where you live? whoopsy. I'm in Napa. Surrounding towns are more affordable and less competitive, but I commute 30 minutes west, wife commutes 30 minutes east. Any other town would mean one of us having to switch jobs, or deal with an awful commute. Besides, a majority of our family is within 1 mile, and that's worth a small price premium and a bit of a headache.
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Aug 30, 2011 02:14
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MH Knights posted:Should fixer-uppers be avoided? Do you have a large amount of cash on hand to complete all of the work that needs to be done? If not you will want/need to go down the route of a 203k loan to get the rehab work written into the loan. It will be a bigger pain in the rear end, and you will probably just end up with a house worth $87K + whatever amount you had repaired if you are lucky. Red Flags: You didn't post any savings so I assume you have $0 to your name. Being single. Unless you are planning on staying that way for quite a while. How do you make $40k/yr and only take home $2100/mo? $710 might get you a $100K mortgage including taxes and insurance if your county has relatively low taxes (1-1.5%). It won't get you to $120K. Living in an old house in Wisconsin will cost you an arm and a leg in the winter unless you want to freeze to death, more $$$. You didn't post why you wanted to buy a house. Its assuredly an unwise financial decision so you probably won't get anyone telling you its a good idea here. Look for houses for rent instead of looking to buy.
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Aug 30, 2011 02:23
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MH Knights posted:Fixer upper Roofing and a water leak doesn't make it a fixer upper. Mortgage calculators lie. You also need a bunch of money up front for inspections and the like, and you'll need to pay mortgage insurance if you have less than 20% down. If you have great credit you can do an 80/20 split but the money you save in mortgage insurance will be spent on a higher interest rate for the second mortgage. Get your 15k school debt paid off, get $20k in the bank, then start house shopping. Alternatively, save up the 20k now if your school loan rate is really low, like under 3%. If you can't find a way to save up $20k then you probably can't afford to fix the house anyway, and you'll live in a shithole for a couple years until you get pissed off at it like I did for my first house.
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Aug 30, 2011 19:30
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LloydDobler posted:Roofing and a water leak doesn't make it a fixer upper. Roofing and water leaks mean you've got $75,000 worth of replacement, repair, remediation and headache in your future. Run, run now.
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Aug 30, 2011 22:59
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LloydDobler posted:If you have great credit you can do an 80/20 split but the money you save in mortgage insurance will be spent on a higher interest rate for the second mortgage. I don't think they offer 80/20 loans after the housing crash. I had one in 2006 and when I refinanced a couple years ago they told me they don't offer them anymore.
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Sep 1, 2011 14:57
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Nocheez posted:I don't think they offer 80/20 loans after the housing crash. I had one in 2006 and when I refinanced a couple years ago they told me they don't offer them anymore. Banks in my area are still financing homes with 80/20. No mortgage insurance was required when we bought our home two months ago and we only had 20% down.
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Sep 1, 2011 15:24
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Guacala posted:Banks in my area are still financing homes with 80/20. No mortgage insurance was required when we bought our home two months ago and we only had 20% down. An 80/20 split refers to an 80% first mortgage and a 20% second mortgage, which is different from putting your own 20% down. For your standard second mortgage financing you can't do an 80/20 anymore for the most part, though there is a special case type of 2nd mortgage where you can still do it depending on lender.
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Sep 1, 2011 15:48
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Do. No. Buy. How do I go about getting a pre-approval letter from my bank? Will they know what this means when I ask? I'm researching an ADU (First time home-buyer / public employee) housing program here and they said to even get in the system to see what's available (even if there is nothing) you need to provide them with a pre-approval letter from a bank.
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Sep 2, 2011 14:04
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Untagged posted:Do. No. Buy. Yes, they will. Make sure you need a pre-approval and not just a prequalification. The preapproval means running your credit, while the prequal does not. If you don't need to have your credit run (ie if a prequal is enough to get into the system), then don't. A preapproval is almost like a promise from a bank to lend a certain amount - it shows that you SHOULD be able to get a loan for that much, but isn't a guarantee. A prequal is more of a "we looked at your basic numbers and here is what we came up with" type thing that is no way a promise or guarantee (since there is no credit pull).
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Sep 2, 2011 14:25
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Can I just take my keys to the bank and tell them to foreclose on my house? I'd prefer that over bankruptcy, as I cannot lose my car. I got a realtor, who doesn't do anything, attempted to do everything the bank offers for financial hardship, was of course declined.
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Sep 3, 2011 02:11
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Insignificunt posted:Can I just take my keys to the bank and tell them to foreclose on my house? I'd prefer that over bankruptcy, as I cannot lose my car. Just wait it out, it can take over a year for them to foreclose on you. Save your money and just live rent free as long as possible. If you want real answers you'll need to give specifics like city/state, mortgage balance, vs worth, etc.
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Sep 3, 2011 03:28
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skipdogg posted:Just wait it out, it can take over a year for them to foreclose on you. Save your money and just live rent free as long as possible. To add to this, if you're in a non-recourse state, this is the best choice you have. Stop paying, live there, save money, and leave when the sheriff shows up to toss you out.
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Sep 3, 2011 04:46
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So I bought a house in July, I was making about 25k a year and my payments were easily doable then, I now have an extremely stable job making 75k plus a year. I was think about trying to pay my house off as quickly as possible, while still saving and putting into my 401K. I have heard mixed reviews about doing this. I have no car payments, and no real debts. What would be in my best interest? the payment is 600 a month. I have a PMI of 89 a month until I reach 20%. Should I race to get the 20% ownership then make smaller payments or just try and pay it all off?
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Sep 3, 2011 19:34
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Rabid Anti-Dentite! posted:So I bought a house in July, I was making about 25k a year and my payments were easily doable then, I now have an extremely stable job making 75k plus a year. I was think about trying to pay my house off as quickly as possible, while still saving and putting into my 401K. I have heard mixed reviews about doing this. I have no car payments, and no real debts. What would be in my best interest? the payment is 600 a month. I have a PMI of 89 a month until I reach 20%. Should I race to get the 20% ownership then make smaller payments or just try and pay it all off? Getting rid of PMI would definitely be prudent. After that I am of the contention that you should be first taking full advantage of your retirement savings options. Does your 401k have matching? If so make sure you are taking full advantage of that. After the match, are you filling up a (Roth) IRA? If not you should. The reason why I feel that the retirement savings options are better than the mortgage payment is that the contribution to a 401k or IRA is a yearly thing. If you don't take full advantage of it, you can't overcontribute the next year to make up for it. So if you don't use it, you lose it. But definitely lose the PMI.
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Sep 3, 2011 19:49
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Depending on the loan you may not be able to ditch the PMI. There may be a provision for the PMI to be in effect until you hit 20% equity OR a minimum of 5 years. I believe this applies to FHA loans, but something similar might apply to conventional mortgages as well.
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Sep 3, 2011 19:53
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I can not start my 401k for a year, so I am dumping extra in my savings, then will just make a large initial deposit to make up for the first year. The company matches 401K's and I am going to max out my monthly contributions. Are there any tax benefits to paying a mortgage vs owning a home. I heard PMI is tax deductible?
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Sep 3, 2011 19:56
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Rabid Anti-Dentite! posted:I heard PMI is tax deductible? Taxes, interest, and PMI are deductible, but as with all deductions (which are different from credits) you're better off not paying for them in the first place.
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Sep 3, 2011 20:09
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I am in a messy situation that really should be easier. After a tumultuous past three years (out of six total), Husband and I decided to divorce about six weeks ago. We originally were planning to short sale our townhome of five years, which is rather underwater mortgage-wise just like millions of people, as neither of us could afford the payment on our own. It was purchased at the top of the market and has declined in taxable value ever since. We are still living here amicably in separate bedrooms until we know what will become of the house. He wants to move into an apartment and has no desires to want to claim anything on the house in the future. I, however, want to stay here. I don't want to live in a crappy studio apartment when I have a two-bedroom townhouse that has five years' worth of emotional value, sweat equity, money for improvements, every appliance replaced out of my own pocket, a garage and easy street access for my dog's bladder. I approach this from the perspective of wanting my home, even if it might be cheaper to live elsewhere. If I knew that I could stay here I would stop caring about the declined house value because it would be my house forever, so who cares. My family has offered a solution that would allow me to keep the home in the form of a certain amount of money each month to help me make the mortgage payment on my own. It doesn't cause any financial strain for them and is "permanent and guaranteed, unless you win the lottery, in which case you have to pay it back" (Dad's words). I am an only child, so, when the time comes for Mom and Dad to peace out, I am their only heir, so I'm not worried about "What if that money goes away". I also receive an amount of money at Christmastime from my grandfather, as does everyone in the family. It is close to the maximum amount of gift money that can be given annually without declaring it as income. I'm concerned, though, that I've learned that I can't simply call the bank and say "Hi, it's me, I'm going to keep paying the mortgage as-is, please take his name off it, thank you", as removing a name from a mortgage means I'd have to refinance a house with a property tax value about $40k less than the mortgage balance. I'd also have to qualify for the refinance on my own, presumably without Bank of Mom n' Dad n' Gramps money figured in, since it all falls under the gift category and thus is not declared income. I'm 100% sure that both my grandfather and my parents would be willing to provide something stating that the money will be there indefinitely if the bank required it. I'm frustrated that this is all so complicated when all I want to do is honor my mortgage payment continuously without having to fall behind on payments in order to get the bank to talk to me (which I was told the first time I called), or to have to re-qualify for a house (or possibly be denied based on my income) that I've been paying for for five years and want to continue paying for for the next 25 until the loan's gone, just on my own now. I'm asking for any suggestions as a direction to be pointed in to begin this process. It'd sure be nice to not have to spend a bunch of money on a lawyer if possible, too, just to stay here paying the same payments I agreed to five years ago. I really appreciate any thoughts on this situation and hope I posted in the right thread for this.
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Sep 4, 2011 02:42
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Froglin posted:I am in a messy situation that really should be easier. You'd have to refi the mortgage in your name only to get him off it. There's no way he can just waive his rights to the property or anything: you both signed the note to pay for it, so until that's done, you're either stuck with his name on it, or you have to get a new loan in your name only. You might try talking to him, to see what he'd be agreeable to, but other than that, you're kinda short on luck. Edit: Keep in mind that during a divorce the house is half his still, and he CAN compel you to sell it, should it end up going that way, but really, talk to him and work out an agreement you can live with, or find the cash to refi it.
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Sep 4, 2011 02:52
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