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