Do you know what an ACV homeowners policy is? Because if you don't have a replacement cost policy, you might want to read this

It would be impossible to read and understand a homeowners policy the first couple of times you tried. Even if you are smart. Even if you are a lawyer. They are complicated to read and contain migraine inducing legalese that is purposefully written to put you at a disadvantage. But you won't know this until you start to research the case law going back a hundred years. And it sounds like you are covered the whole time, and they will tell you how fair they are. Until the end. Then you will find out that they are fair. They are paying you exactly what they said they would pay you in the 65 page policy you thought was good insurance.

The policy you have buried away with your files, that you have never read, will probably be read for the first time right after you discover that you have a big claim. Mine was still sealed in the envelope it came in because I didn't even open it. And good luck trying to understand it the day after your roof blew away and you look up to see the rain pouring through your open roof and seeping through your floors.

If this has happened to you, let me save you the trouble of wondering what the insurance company is going to pay for. The answer is: it depends. If you have a policy that is "Replacement Cost" you are in much better shape than if your policy says "Actual Cash Value". Because if it is an ACV policy, they are going to pay you a lot less than it will cost to fix your property. Now re-read that and let it sink in..................

With actual cash value, if your roof is destroyed and it is 10 years old, they will pay you the value of the roof right before the storm hit. So if a new roof is $10,000 dollars and the old one was on the 10th year of its 15 year expected life, they will only pay $3,333 minus your deductible. My deductible was $2,500.

Uh huh.

So call your agent today, find out what kind of policy you have and make sure you learn from this mistake. You will be glad you did.

REMEMBER:  ALWAYS GET REPLACEMENT COST COVERAGE!

Getting a mortgage in Aspen

There are few places on earth more beautiful than the Aspen, Colorado area. The areas that comprise Aspen are broken down by the four ski areas known as Aspen Mountain. Aspen is generally regarded as the most expensive city in the country in terms of buying a home. Aspen has everything from estate to mobile homes costing 1 million dollars. The median asking price for homes in Aspen is usually around $4,000,000. 

Rate Lock: What if interest rates are increasing while your home is under construction?

You have carefully planned your new home and it is going to be the home of your dreams. Before you started the construction, your lender told you the rates were around 3.5% but now they have increased to 4.5% and your payment is more than 10% higher than you have anticipated. Your lender also told you that you cannot lock until it is less than 90 days from the closing.  Being stretched is one thing, but 10% more is really cutting in to your discretionary spending. So now what do you do?

Before you build your home you should really inquire with your lender about a one-time close option. This is one of the few programs that allow a rate to be locked for the permanent loan prior to closing the construction loan.

A one-time close loan is used to finance the construction portion of the loan and then it converts to the permanent loan as soon as you are given permission to occupy the home. Many banks have such a program but not all. If you are looking for a mortgage, search mortgage rates from the best lenders at checkrates.com   

Having Problems Keeping Your Mortgage Current in California?

California is always innovating, and this is true even in the area of foreclosure assistance. If you live in the state and are behind on your payments, there may be help at www.keepyourhomecalifornia.org.

Eighteen "hardest hit" states including California negotiated a fund of $18 Billion from the federal government to help homwoners stay in their homes.

The three programs that were established in 2010 were :

  
Each of the Keep Your Home California programs is designed to address one or more aspects of the current housing crisis by doing the following:

Helping lower income folks if they have suffered a hardship such as job loss, death, disability, or if they signed a bad loan such as an ARM or negative ammortization loan like the option ARM.

If this has happened to you, visit this site and keep your home. Many if not most mortgage servicers are participating in this program. You can see if you servicer is participating by going here.

Californians: If you are late on your mortgage payments, do not delay, get in touch with a counselor ASAP. (888) 954-KEEP

Pros and Cons of a VA Loan

     Are you a Veteran interested in buying your own dream home? If you were honorably discharged, then you can easily opt for a VA mortgage loan.  Confused or having doubts about what a VA mortgage is?  Then let us help you and provide the necessary details.

What is a VA Loan?
     Basically, a VA mortgage is a loan to buy a home, available only to the veterans, active duty, or reservists of the United States Armed Forces, and which is guaranteed by the Veterans administration. This type of loan offers lower down payment requirement than most standard mortgages and lower comparable interest rates. This is possible because the banks know that the loans are backed by a federal agency and the bank will be paid back losses on the loan if it ever defaults. Spouses of veterans are also eligible to get a VA mortgage even if the veteran is deceased.

History of VA Loans

     In 1944 after the World War II the VA mortgage guarantee program was invented so that it could limit the effects of economic and social hardship that the millions of veterans faced in the war. The basic function of the VA mortgage program is to finance or guarantee the conventional mortgages for the eligible U.S. veterans. This program does not lend money directly to borrowers but it only guarantees to lenders that they will recoup 25 percent of a loan if the borrower defaults on it. It therefore gives lenders the incentive to lend to veterans. Only an eligible VA veteran or his family is eligible for a VA Loan. 

Pros and Cons of a VA Mortgage 

     There are three major benefits in having a VA home loan. 

First,  The VA mortgage eliminates the need for private mortgage insurance, an insurance premium the borrower pays in order to protect the lender against borrower defaults. Even the FHA has a very high monthly premium that Veteran loans do not have. 

  

      Second,  A veteran can purchase a home using the VA mortgage program without putting any money down. This is ultimately up to the borrower. If the borrower wants to put money down, he still can do so.

      

     Third, VA mortgage programs provide low, competitive and fixed interest rates often .25%-.5% less than regular conforming loans. 

      Misconceptions about VA Loans

People are of the misconception that the VA mortgage program can be used only once by a qualified veteran, however, this isn't true. This program can be used as many times as needed if all the guidelines are followed perfectly.

People are also under the misconception that the VA makes loans. The VA does not make loans, however they will insure the lender against losses so banks really like this and it gives them an incentive to make loans. So you have to find a bank that makes VA loans and apply with the bank or lender of your choice. 

Colorado VA loan participating lenders 

Homeowners Insurance Covers a Lot More Than Fires

Homeowners Insurance Covers a Lot More Than Fires

Insurance provides a safeguard against risks that may arise from a future event leading to losses. The insurance company accepts the risk of these events for a fee. By spreading out these risks over many thousands of homeowners, the funds will be there for the homeowner that runs into a situation where the loss is just too big to pay from savings. Most of the time, the bank requires an insurance policy to protect a home since it is their collateral for the mortgage loan.

What is the difference between the insurer vs. the insured?

The insurer is the company that offers insurance in exchange of a fee whereas the policyholder (or called insured) is the person who buys the insurance policy and is covered by it. The policy is the contract that details the circumstances and conditions which will be considered for financially compensating the insurer. It also details which events or disasters will be covered by the policy. This is called a loss. Insurance can be purchased to cover almost anything of value.

What are some common losses?

According to most insurance studies analyzing losses from 2000 to 2007, water damage issues causes the most losses. Other common insurance claims are caused by fire, theft claims and dog attacks and bites. If you are buying a home, consider insurance from Brian Hert at Summit Insurance Group. Denver Homeowners Insurance. If you property is anywhere else in the USA, you can get a Homeowners Insurance Quote here.

Insurer vs. Insured

Insurance is a Necessary Safeguard, the difference between Insurer VS. Insured

The insurer is the company that offers insurance in exchange of a fee whereas the insured or policyholder is the person or entity that purchases the policy. The appraisal and risk controls through insurance coverage is done by paying a premium. The contract or policy comprehensively details the circumstances and conditions which will be considered for financially compensating the insured in the event of a loss or claim. Insurance is offered in almost every form of business or can be purchased to protect almost anything of value. Common forms of insurance are:

Auto insurance to protect against theft, accidents, vandalism, and weather events.

Home Insurance to protect against any damage to your home.

Commercial Insurance for protection of business property of all kinds.

Health Insurance protects against medical expenses.

Life Insurance protects your income for loved ones in the event of death.

Disability Insurance protects against a period where you are unable to work for health reasons.