04/05/21: Monopoly Mortgage Monday – Homeowners Insurance Policy Time!

Good day. It’s time to play Mortgage Monopoly again Southern Lakes Credit Union members!

This time you give the dice a roll and land on the Homeowners Insurance Policy square. When purchasing homeowners insurance, you will need to provide your insurer with information about yourself and your home. You can apply for homeowners insurance online, over the phone, or in person at the insurer’s local office and you’ll usually get a quote the same day.

To better prepare yourself for the homeowners insurance shopping experience, be sure to do the following:

  • Familiarize yourself with the basics of homeowners insurance
  • Gather information about the house, like its replacement cost, style of build, and other characteristics like the roof age and type of heating system
  • Compare coverage and rates from multiple companies, and select a policy
  • Check your eligibility for any available policy credits and discounts
  • Choose a billing plan and sign

Step 1: Understand your homeowners insurance needs

Before you begin shopping for your homeowners insurance policy, you should have a general idea of how much coverage you need to ensure your home and personal possessions are fully covered. You’ll also want enough liability coverage to withstand a potentially expensive lawsuit.

The following components are in every standard homeowners insurance policy. Having an idea of how much coverage you need for each policy provision will make you a more prepared shopper.

  • Dwelling coverage – Your dwelling coverage limit should be equal to your home’s replacement cost, or how much it would cost you to rebuild the home in the event it was destroyed. Insurance companies will propose a home replacement cost for you during the quoting process, based on information like its square footage, number of bathrooms, and local rebuild costs. For a more accurate estimate, consider getting a proper replacement cost appraisal of your home
  • Personal property coverage – Personal property coverage limit is typically set as a percentage of your dwelling coverage limit (typically 50% or 75%). To enhance your claim payouts and increase coverage limits on expensive valuables with strict coverage limitations, consider replacement cost contents coverage or scheduled personal property coverage
  • Additional living expenses – If you live in an area that experiences frequent natural disasters, consider adding more loss of use coverage to your policy to cover relocation expenses if you’re displaced from your home. Loss of use coverage is typically 20% of your dwelling coverage limit, but it may be possible to increase your coverage limits
  • Liability coverage –  Liability coverage protects you from expensive lawsuits in the event you’re legally responsible for someone else’s injury or property damage. Insurers generally offer anywhere from $100,000–500,000 in protection. To determine how much coverage you need, add up the value of all of your assets, including your home, vehicles, investments, future wages, and personal belongings
  • Medical payments coverage – Medical payments coverage is no-fault coverage for guests’ medical expenses if they’re injured on your property. Medical payments coverage is generally anywhere from $1,000 to $5,000

Step 2: Figure out how you want to shop for homeowners insurance

The best way to shop for any type of insurance — be it homeowners or life insurance — is to compare policies across multiple companies. Independent agents don’t work for an insurance company, so they can give you unbiased advice about which policy is best for you.

Step 3: Information you’ll need when you shop

The more details you have about the home, like the interior specs, the more accurate your quote will be.

Here’s a rundown of the information you may need to provide to your agent or broker in order for them to produce accurate quote estimates when you apply.

Home information

  • Address of your home – The address of the property being insured
  • Insurance appraisal – To determine the full rebuild value of the home if it’s damaged or destroyed. This can be done by referencing a recent home insurance policy, hiring an appraiser, or hiring roofing companies, contractors, and builders to assess value to individual parts of your home
  • Lender requirements – Let your broker know if your mortgage lender requires any additional levels of coverage like flood insurance

You’ll also need to list who will be living in the insured home, whether you’ll be renting the home out or not and if you consider the home a primary or secondary residence. For example, if you’re renting it out or use the residence as a home office, your insurance broker may offer suggestions to maximize your home insurance tax deductions that are available for rental or home office properties.

Personal information

  • Date of birth – This can help an agent or broker access your insurance history
  • Occupation – Depending on your occupation, you may be eligible for certain discounts or group rates
  • Social Security number – To access your credit history which better informs the rates you’ll be paying.
  • Property history – If you haven’t lived at the home you’re seeking coverage for at least two years, you’ll be asked to provide addresses for previous residences
  • Liability questions – Carriers will want to know if you have any pets, trampolines, tree forts, or pools (and whether the pool is above-ground or in-ground, specifically)

Step 4: Compare quotes and select a policy

After you’ve given your agent all the required information about your home, it’s time to get quotes and select a home insurance policy. Make sure to analyze a variety of policy options so you’re able to do a proper comparison, don’t automatically choose the cheapest policy without checking to make sure it’s got the coverage you need.

Apart from the policy itself, you’ll also want to look into the insurance company’s background. Be sure they’re a financially stable company, read reviews and check their ratings with third-parties like A.M. Best, J.D. Power, and Consumer Reports, to name a few.

Step 5: Finalize your policy details

You’ve compared quotes, gotten all your most pressing questions answered and selected a policy, now it’s time to choose a billing plan and policy deductible.

If you’re buying a home and need homeowners insurance to close on the property, there are a few details you need to finalize first:

Premiums – It’s common practice for lenders to require that premiums for the year be paid in full ahead of closing on your mortgage. Be sure to clarify with your agent if this is the case — the agent will be in contact with your lender about coverage and billing requirements for how your insurance will be paid moving forward.

  • Deductible – You’ll also need to set your policy’s deductible, which is the amount you pay before your claim for damages is covered. From a cost standpoint, what you’re looking for is a low monthly or annual premium. So if you don’t plan on filing many claims, choose the higher deductible.
  • Effective date – Lastly, you set the policy’s effective date, which is when your coverage begins.

Once your billing and policy dates are set and your lender approves the policy, you’re good to sign on the dotted line.

Step 6. Prepare for the insurance inspector

Your home insurance carrier will typically perform an inspection of the property to make sure everything is in order and reported as quoted. If anything is off or you forgot to mention something in your application, your adjuster will take note of the errors and omissions and you’ll see it reflected — for better or worse — in your next bill.

For example, maybe your roof is about 10 years older than you stated on your application; or on the flip side, maybe you forgot to mention that your home has certain protective features like a security system or stormproof windows that could lower your rates.

The next step after you have completed your search for a homeowners insurance policy is to get an Appraisal Order. I will discuss that topic next week. This is quite a bit of information, so I know you must have some questions. I invite you to reach out to me so I may help answer them. You can either leave them in the comment section below, message me here, or call me at (262) 723-4888 x810.

Until next week folks! I am Joe Riesterer, Mortgage Loan Officer with Southern Lakes Credit Union. NMLS #290200

03/29/21: Monopoly Mortgage Monday – Roll the Dice! Application Square.

Welcome back once again Southern Lakes Credit Union members. It’s time to play Mortgage Monopoly!

This time you shake the dice, give them a toss and land on the Application square. After selecting a lender, the next step is to complete a full mortgage loan application.

Most of the application process was completed during the pre-approval stage. But a few additional documents will now be needed to get a loan file through underwriting.

For example, your lender will need the fully executed Purchase Agreement, as well as proof of your earnest money deposit.

Your lender may also request updated income and asset documentation, such as pay stubs and bank statements.

You will receive a Loan Estimate typically within three business days which will list the exact rates, fees, and terms of the home loan you’re being offered.

At this time you will also pay for an appraisal. Your lender will arrange for an appraiser to provide an independent estimate of the value of the home you’re buying.

Most lenders use a third-party company not directly associated with the lender.

The appraisal lets you know that you’re paying a fair price for the home.

Also, in order for the loan to be approved at the contracted purchase price, the home will need to appraise for the contracted purchase price.

The next step after you have signed your loan application is to begin your search to obtain Homeowners Insurance. I will cover that topic next week. This is a lot to digest, so I know you must have some questions. I invite you to reach out to me so I may help answer them. You can either leave them in the comment section below, message me here, or call me at (262) 723-4888 x810.

Please come back next week as we go to the next square on our board, “Homeowners Insurance.”

Until next time folks! I am Joe Riesterer, Mortgage Loan Officer with Southern Lakes Credit Union. NMLS #290200

03/22/21: Monopoly Mortgage Monday – Roll the Dice! Contract Time.

Welcome back Southern Lakes Credit Union members to Mortgage Monopoly!

Time to roll the dice again! You give them a shake, toss them across the board and land on the Contract square. For homebuyers, real estate contracts can be bittersweet. The prospect of buying a house is exciting, but can also be quite daunting. There’s a lot at stake — your new home! — and a lot of boxes to tick before closing the deal.

Preparing for and wrapping your head around all the requirements leading up to the biggest purchase of your life is no small feat. It all hinges on what’s in a real estate contract. Knowing the composition of a real estate contract that’s competitive, realistic, and protects your best interests can literally make or break the deal. Having a knowledgeable and trusted Realtor assist you with this is imperative.

As you begin the search for a home to call your own, deftly navigating a real estate contract will help you conquer any obstacles along the way. Armed with the knowledge you need will lead you to a quick and painless closing in no time.

How a real estate contract works: The basics

When you’re buying a house, a real estate contract is the legal document that outlines the terms and details of a real estate transaction. The most common type is a purchase agreement. The primary purpose of a real estate contract is to clearly identify expectations of the buyer and seller and protect them both in the purchase process. Let’s break down how the contract works.

Step 1

An official offer form is prepared by the buyer’s real estate agent and submitted to the seller to accept or counter. Among other details, the offer will include a description of the parties and property, the purchase price offer, the earnest money deposit amount, the closing costs involved, and the proposed closing date.

Step 2

The seller accepts or rejects the offer. If the seller counters the offer, the seller or their listing agent will send back a counter-offer for the buyer to likewise accept or reject. A counter could include changes or modifications to one or more components of the offer, like purchase price, closing costs, or a contingency.

Step 3

It’s a deal! Or not. Once the seller accepts the initial offer or the buyer accepts the counter-offer, it becomes a legally binding contract, and both the buyer and the seller work to meet the terms and conditions outlined in the contract. If the buyer and the seller can’t agree on all the terms laid out in the offer, there is no agreement or contract.

So how quickly do negotiations and the offer become a signed, legally binding contract? Actually, pretty quickly, If there is only one buyer submitting an offer on a property, most of the time a transaction is agreed upon in the first 24 hours.

In a multiple-offer situation, many times a seller will put the property on the market for 24 to 72 hours knowing that they have an aggressively priced property. After the time allowed for multiple offers to come in, the seller will make a decision based on the best price and closing date. Once the offers are in for review, usually within 24 hours there’s a commitment and a signed contract.

The next step after you have signed a contract is the application process which I will cover next week. While I have covered the basics of a contract, I know you must have some questions. I invite you to reach out to me so I may help answer them. You can either leave them in the comment section below, message me here, or call me at (262) 723-4888 x810. Be advised that any questions of a legal nature should be directed to your attorney.

Please come back next week as we go to the next square on our board, “Application Process.”

Until next time folks! I am Joe Riesterer, Mortgage Loan Officer with Southern Lakes Credit Union. NMLS #290200

03/08/21: Monopoly Mortgage Monday – Roll the Dice! Make an Offer.

Hello Southern Lakes Credit Union members! Welcome back to our Mortgage Monopoly.

Congratulations! You have found the perfect home and are ready to roll the dice again! So, you pick up the dice toss them across the board and you land on the next space, Make an Offer This is one of the most exciting and nerve racking squares. This is where having a knowledgeable and trusted Realtor can really help you out. Your Realtor will talk with you about the home you want to make an offer on. Some things you will discuss are, the overall condition of the home, how much you love the home, and of course how much you are willing to pay for the home. In this current market because homes are being sold very quickly you will want to be prepared to make a quick decision here.

After you and your Realtor agree on the terms of your offer your Realtor will write up an Offer to Purchase and submit it to the seller along with your pre-approval letter. The pre-approval letter shows the seller that you have already been qualified for the loan and are serious about making a purchase. This is why a strong pre-approval letter from a reputable lender is very important. Once your offer is submitted, you and your Realtor wait to hear back and see if your offer is accepted. If your offer gets accepted, you get to move forward in the Mortgage Monopoly game and roll the dice again!!

The next step after your offer is accepted is reviewing the contract which I will go over next week. I know you have some questions, so I invite you to reach out to me to have those questions answered. You can either leave them in the comment section below, message us here, or call me at (262) 694-1600 x 604. Please come back next week as we go to the next square on our board, “Sales Contract.”

Until next time folks! I am Shelly Floreani, Mortgage Loan Officer with Southern Lakes Credit Union. NMLS #1436594

03/01/21: Monopoly Mortgage Monday – Roll the Dice! Find A Home!

Congratulations! You’ve completed the pre-approval process and are ready to roll the dice again! So, you pick up the dice toss them across the board and you land on the next space, Find A Home. This is one of the most exciting squares on our board, you get to go home shopping! However, before you do you want to do 2 things. You will want to; 1) Assess your wants and needs, and 2) Select a Realtor.

To assess your wants and needs put together a list with whomever you are buying your home with. If you are buying the home by yourself, you still want to make a list of needs and wants. Don’t skip this step. Knowing what you want out of your home will help you to be much happier with your homeownership experience and avoid regrets. So what kind of things should you consider? Probably number 1 on the list for most people is location. With location you’ll want to consider items like area schools, distance to work, character of the neighborhood, property values of similar homes and what nearby amenities are important to you. You’ll also want to make a list of needs and wants in the home itself. Some items to consider are, how many bedrooms and bathrooms you need now and possibly in the future? What size lot is important to you? What is the age and condition of the home?

After you have your list of needs and wants it is time to choose a Realtor! How do you choose a Realtor? Ask friends and family for their suggestions and who they were happy using. You can also ask me, your Mortgage Lender. I’ve been fortunate enough to work with several Realtors in the area and can suggest someone who I think would work well with you.

That is how you begin your home search! I know you have some questions, so I invite you to reach out to me to have those questions answered. You can either leave them in the comment section below, message me here, or call me at (262) 694-1600 x 604. Please come back next week as we go to the next square on our board, “Making an Offer.”

Until next time folks, I am Shelly Floreani, Mortgage Loan Officer with Southern Lakes Credit Union. NMLS #1436594

02/22/21: Monopoly Mortgage Monday – Roll the Dice! Pre-Approval!

You’ve rolled the dice and landed on square 1, Pre-Approval! This is where the great game starts. There are 3 main areas we will look at to get you pre-approved. They are 1) Your income, 2) Your assets and 3) Your credit. Don’t worry if you feel like you are deficient in any of these areas. We can sit down and discuss some options for you. So what exactly do we look at in these 3 areas?

Your income – With income one of the main factors we are look at is stability. We like to see at least 2 years at a job. But, what if you recently graduated or changed jobs? Doesn’t that time count? Great question, and yes it does! If you have recently graduated from college and are now starting a new job in your field of study we can count your time in school as time towards the 2 years. If you have recently changed jobs, but are in the same career field than the time at your last job counts as well. If you change career fields without any education behind it, then unfortunately we are unable to count your previous job towards the 2 years. One more caveat to take note of is part time work. If you work part time then we would need 3 years of job history.

Assets – When we say assets, what do we mean? Do you need to provide everything? What we typically need for assets is two things. One, we need to know where the cash for closing is coming from. If it’s your checking/savings then we would need 2 months of the most recent bank statements. If it’s coming from a retirement account then we would need 2 months of the most recent statements for the retirement account. We also need to know where your income is being deposited. For most people this is their checking or savings account. Therefore, we would need 2 months of your most recent bank statements showing the income deposits.

Credit – Your credit is very important when it comes to getting a mortgage. In most cases we need a credit score of at least a 620. There are some instances where we can go below that, but it will be evaluated on a case by case basis. Your credit score will determine what loan program you qualify for. But you do not need to worry about that. We will go over it after you submit your application. And if your credit needs some polishing, I can let you know what is your best course of action to help improve your scores.

So you have all 3 pre-requisites checked off. What do you need to do in order to get your pre-approval? One, you will need to fill out an online application, which can be done on our website, or you can call me to schedule an in person appointment. Two, you will need to gather some documentation to prove your income and assets. Typically I will need the following documentation for this: 2 months of your most recent bank statements, 2 years of W-2s, and 30 days of your most recent paycheck stubs. We may also require 2 years of tax returns so it is good to have those ready too.

That folks, in a nutshell is what is required for your pre-approval! I know you have some questions, so I invite you to reach out to me to have those questions answered. You can either leave them in the comment section below, message us here, or call me at (262) 694-1600 ext. 604. Please come back next week as we go to the next square on our board, “Finding a Home.”
Until next time folks! I am Shelly Floreani, Mortgage Loan Officer with Southern Lakes Credit Union. NMLS# 1436594

02/08/21: Monopoly Mortgage Monday Begins

Hello Southern Lakes Credit Union members! I am excited to announce that we are going to begin a new series on the home buying process! What better way to do this than by using everyone’s favorite real estate game, Monopoly!
Beginning next week, I will show you what it takes to get you from Start to Finish and how to get more helpful “Community Chest” cards while avoiding the “Go to Jail” pitfalls.

When we get a Community Chest card they will explain what helpful things you can do to get your loan to closing faster. The “Go to Jail” cards will explain common areas that can derail your loan and prevent you from becoming a homeowner. I’m very excited to be sharing this with all of you. Please come back next Monday as we start on the first square, Pre-Approval!

If you have any questions as we go along feel free to post them below, message me here or call me directly at (262) 694-1600 ext. 604.