September 3rd, 2010
Homeowners Insurance The Mortgage Connection
A home owners insurance is the cover for the house against natural calamities as well as liability. This covers the house and its contents but also other personal possessions which the house secures. The natural calamities include fires and winds. It covers thefts and vandalism as well. It is also called hazard insurance (http://www.mortgagefit.com/hazardinsurance.html)
It is not mandatory like in the case of automobile insurance to have a homeowners insurance. But when one mortgages the deed of trust or mortgage requires the collateral to be insured. This is because in the event of a default the lender must not suffer. If in the time span the house gets damaged due to a wind or accident the value on sale will decrease and thus the lender will not be able to get back the debt balance.
Why does the lender insist on a homeowners insurance?
Firstly the lenders name or the mortgage company appears on the certificate of the insurance policy. The lender is categorized as a loss payee or a mortgagee. This ensures that the lender is entitled to the insurance amount if the borrower defaults.
Secondly the insurance premiums are paid little by little along with the monthly obligations or it is deposited in with impound or escrow account. In both cases the lender can earn the interest which is earned out of this amount. Moreover an escrow requires an amount much more than a single premium to fund the account.
The manner of payment of the insurance premiums differs from lender to lender. Some require that the insurance premiums be paid off in the first year after closing; while others will spread the same throughout the loan term.
What you should keep in mind before taking a homeowners insurance?
You should shop for an insurance agent extensively .You must go in for an insurance company which will make an honest evaluation of your home value.
This insurance is not only for a liability security it is important to the borrower as well especially if you aim for a refinance or a remortgage. The collateral remains the same .Thus you can still avail of a loan amount equal to the earlier mortgage amount if not more (due to appreciation).
For a detailed study of mortgage and such other terms you can log onto:
http://www.mortgagefit.com
About the writer:
Lance Wiliams is an accomplished contributing writer presently working in association with http://www.mortgagefit.com. He specialises in mortgage and real estate arena.
Posted in Business
September 2nd, 2010
Online Insurance: The End Of The High Street Broker?
Once the insurance salesman visited you then you visited his office. Now you pick up your phone or click your mouse. Does the Internet herald the end of the high street insurance broker in Britain? When I was a lad some 25 years ago the Insurance Company called to your door every month to collect your life insurance premium. My recollection is of a drab suited man having to run the gauntlet of neighbourhood dogs rather like the postman.
Then through the eighties more and more people found their wages being deposited directly into hastily set up bank accounts; this led to the standing order for paying all sorts of regular bills including insurances and heralded the demise of the door to door representative. An economy quickly realised by big insurance companies in the UK.
Then during the nineties big firms latched on to the idea of direct which is a handy abbreviation for cutting out the middle man. Just watch tv or listen to the radio toady and you are sure to observe this direct and that direct. The purpose of this in the world of insurance is to cut out the traditional high street broker and the percentage paid to them wherever possible.
The advent of the Internet and its increasing usage in most homes up and down Britain has accelerated the direct phenomenon. The big boys have quickly realised that websites are cheap to build and in addition there is a small army of privately owned websites on the World Wild Web that are more than happy to promote their insurance products for a commission this commission usually being a lot less than a typical shop front broker is currently paid.
This all sounds very goodfor the PLC that is. From the consumers point of view the casualty in all this is usually the level and quality of service. Its fine when you are arranging your policy on the phone or on the net and you can even have the privilege of paying there and then by credit card. What will the direct experience be like when it comes to making ac claim? Just how direct is a callcentre located in India? While you the consumer are no doubt seeing some of the savings by skipping the broker dont think for one minute that all the savings are being passed on.
So in ten years time will the high street broker be a thing of the past?
About the writer:
George McGonigal is webmaster of online insurance resourcs for UK motorists. We bring under one roof insurers who offer online quotations to allow our visitors to compare rates in the comfort of their own homes. Why not visit www.scotlandinsurancecentre.co.uk or our sister site www.quickclickinsurance.co.uk.
Posted in Business
September 1st, 2010
Refinancing Your Home Is The Time Right?
Refinancing your home is a major decision not to be taken lightly even in this era of low interest rates and easy money. While every mortgage company in town is touting the strategy of getting a new loan before rates rise again there are several things you’ll want to be mindful of before you go about refinancing your home.
In my view the key to refinancing your home isn’t just the rate they’re offering you: it’s the total package looked at not only in terms of today but a few years down the road. Many people have taken out new loans that really weren’t quite right for their long term situations thinking they’d be able to refinance again in the nottoodistant future. That may or may not prove to be true. No one has a crystal ball that’ll give you a definitive idea of just where rates will be even a year from now so try to approach this with a somewhat more longtermed view. It’s very easy to get tempted by the prospect of easy fast cash but in the end you end up giving it all back in terms of higher payments and worst case be unable to make your payments and lose your home. Just look at all the costs associated with this new loan determine what the payments will be in 2 5 and 10 years or whatever your timeline is and make an informed decision unfettered by a mortgage broker’s “opinion” what’s “best” for you. They have a vested interest in getting you into a loan any loan and WILL NOT repeat WILL NOT have your best interests at heart when you go about refinancing your home.
Some things to consider when refinancing your home would be the type of loan (fixed ARM etc.) the rate the term the costs associated with the loan any cash equity you’d like to take out and the time and documentation necessary for refinancing your home. This is a wildly competitive market and please do yourself a favor and shop around. The same loan one lender will offer you can vary greatly from another just down the street as far as total costs go. Don’t be afraid to say no: they’re not doing you a favor by “giving” you this loan. They’re reaping many thousands of your dollars in interest so make sure you get what you want not what they want to sell you. Remember you’re refinancing your home not their summer vacation!
All in all when refinancing your home take your time. Shop around compare and you are the customer and what was that they say about the customer always being right? You are as long as you do your homework when refinancing your home.
Copyright 2005 Keith Thompson
About the writer:
Keith Thompson is a real estate investor and webmaster at http://www.mortgageloanstoday.com where you can find more information and resources for refinancing your home.
Posted in Business