20
Oct
By First Rate Financial Group
Mortgage Tips

What To Know About Flood Insurance

What To Know About Flood InsuranceFlooding can happen in any location at any time. Even though many people associate floods with coastal properties, flooding can take place inland as well. That is why you always need to take a look at the map to figure out whether your property is located in a flood zone. There are some situations where your lender might require you to purchase flood insurance. What do you need to know?

What Is Protected And What Is Not?

When you purchase flood insurance, there are three broad components that you should examine. You need to check and see whether the policy covers the building, the contents of your home, and potential replacement expenses. Flood insurance policies generally insure any physical damage done to your house as well as any belongings you have inside your home. This might include your walls, household appliances, plumbing system, electrical system, clothing, and furniture.

On the other hand, most flood insurance policies do not cover your outdoor structures. For example, they will not protect your patio, swimming pool, fence, or vehicles parked outside the home.

What Is Your Flood Risk Level?

Your flood insurance premium will vary depending on where you are located. For example, if you are in a flood zone, your flood insurance premiums will probably be significantly higher; however, a significant percentage of flood claims occur in areas that are not located in a flood plain. While your premium should be lower, you may want to talk to your real estate agent to see whether it is worth it to purchase flood insurance.

Is Flood Insurance Required?

Flood insurance has its limitations, just like any other insurance policy. Therefore, you might be wondering whether it is required.

If it is required, it would be required by your lender. If your house is located in a flood zone, there is a significant chance that your lender will require you to purchase flood insurance as a requirement for financing. If you refuse to purchase flood insurance, then your lender might refuse to finance your property. You should always compare flood insurance premiums across different companies before you decide which one to go with. Be sure to compare policy coverage options and limitations as well. 

 

19
Oct
By First Rate Financial Group
Mortgage Tips

The Top Tips To Get Your Offer Accepted

The Top Tips To Get Your Offer Accepted In A Seller's MarketThe housing market today is very competitive, and you might be wondering how you can get your offer accepted. If the seller has multiple offers on the table, it can be a bit of a challenge. Many people assume that the best way to get an offer accepted is to offer the most money. Even though that is certainly helpful, there are several other tips you should follow to make sure your offer is the one the seller picks.

Get Pre-Approved For A Mortgage

First, you must make sure that you get pre-approved for a mortgage. Unless you are paying cash for the home, you should talk to a local loan officer to get a pre-approval letter. You don’t have to go with that company once the dust settles, but you need to get a pre-approval letter from a lender. That way, the seller will know that you have a high chance of getting approved for the loan.

Offer More Earnest Money

If you are willing to offer more earnest money, that will make the seller more comfortable. The seller is always worried that the buyer might pull out on the offer, meaning that their home will go back on the market. If you increase the amount of earnest money you put down, the seller will feel more confident that you are serious about buying the home.

Give The Seller The Option To Rent Back

If the seller accepts your offer, you will have between four and six weeks before your first mortgage payment is due. Therefore, you won’t have any payments after closing for a while. If the seller is not ready to move yet, or if the seller has not found a new home, offer the seller an opportunity to rent the home back for free. This will give the seller more time to get everything in order before they move. 

Increase The Strength Of Your Offer

In a seller’s market, you need to make your offer stand out. Otherwise, you may have a difficult time finding a house, particularly if you cannot pay cash. If you follow these tips, you can increase your chances of having your offer picked by the seller. 

 

17
Oct
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – October 17, 2022

What's Ahead For Mortgage Rates This WeekLast week’s economic reporting included readings on month-to-month and year-over-year inflation and the minutes of the most recent meeting of the Federal Reserve’s Federal Open Market Committee. The University of Michigan published its preliminary consumer sentiment reading and weekly reports on mortgage rates and jobless claims were also released.

September Inflation Readings Provide No Relief

Inflation rose by a month-to-month pace of  0.40 percent in September as costs for staples including rent, food, and medical care increased. The Fed raised its target interest rate by 0.75 percent. Year-over-year inflation rose by 7.20 percent; this was the highest growth reading since 1982. The Federal Reserve considered a year-over-year rate of two percent inflation to be normal before the pandemic. September grocery prices were 13 percent higher year-over-year and reached their highest growth pace since 1979. Rents rose by 0.80 percent in September and the increase concerned economists who predicted no immediate end to high inflation. Rising rents are particularly significant as rent represents the largest component of most tenants’ budgets.

Core inflation, which excludes volatile food and fuel sectors, reached a 40-year high in September after increasing by 0.60 percent in August. Analysts expected a month-to-month increase of 0.40 percent based on August’s core inflation reading of 0.60 percent.

Year-over-year core inflation dipped to 8.20 percent in September. Analysts expected a reading of 8.10 percent; the year-over-year inflation reading for August 2022 was 8.30 percent. By comparison, the year-over-year core inflation readings for September 2021 were 6.60 percent with an expected reading of 6.50 percent and an August 2021 reading of 6.30 percent.

Mortgage Rates, Jobless Claims Rise

Freddie Mac reported higher average mortgage rates last week as the rate for 30-year fixed-rate mortgages rose by 26 basis points to 6.92 percent. Rates for 15-year fixed-rate mortgages averaged 6.09 percent and were 19 basis points higher. The average rate for 5/1 adjustable rate mortgages rose by 45 basis points to 5.81 percent. Discount points averaged 0.80 percent for 30-year fixed-rate mortgages and 1.10 percent for 15-year fixed-rate mortgages. Discount points for 5/1 adjustable rate mortgages averaged 0.80 percent.

Initial jobless claims rose to 228,000 first-time claims filed as compared to the previous week’s reading of 219,000 initial claim filings. The University of Michigan released its October consumer sentiment index with an index reading of 59.8; analysts expected a reading of 59.0 and September’s index reading was 58.6. Readings over 50 indicate that most index participants surveyed had a positive outlook on current economic conditions.

What’s Ahead

This week’s scheduled economic news includes readings on U.S. housing markets, building permits issued, and housing starts. Sales of previously-owned homes will be reported along with weekly readings on mortgage rates and jobless claims.