Do Real Estate Agents Have a Future?

I hear all the time how websites like Zillow and Trulia are going to replace the real estate agent, much like the travel agent was replaced by online travel sites. I see posts on forums or get emails explaining why real estate agents are paid too much and the industry must change or technology will … Read more

Source: investfourmore.com

Attention to Every Detail

If you ask Relentless Agent Award Winner, Laura Ennis of CENTURY 21 AllPoints Realty in Enfield, CT, what makes her stand out from the crowd, she’ll tell you

Source: century21.com

What You Need to Know About the Fair Housing Act

If you’ve searched for a new place to live recently, you’ve likely seen the Equal Housing Opportunity logo (an equal sign inside a house) on a landlord’s, real estate agent’s or lender’s paperwork.

But the Fair Housing Act is more than just a logo. It’s a federal law designed to protect renters and buyers from discrimination.

Here are some key points to know about the Fair Housing Act when you’re searching for a place to live.

What is the Fair Housing Act?

Also known as the Civil Rights Act of 1968, the Fair Housing Act was signed into law by President Lyndon B. Johnson just days after the assassination of Martin Luther King Jr., who had championed the cause for many years.

The act prohibits housing discrimination based on race, color, religion, national origin, sex, disability and familial status (sex was added in 1974, and disability and familial status were added in 1988).

At the time the act was signed, overt housing discrimination was a huge problem throughout the country, including the attempted segregation of whole neighborhoods and the outright rejection of qualified renters based on race and other factors.

Today, much of the discrimination in the housing market is less obvious, but it’s still an unfortunate reality.

According to the National Fair Housing Alliance (NFHA), over 25,000 housing discrimination complaints were filed with the federal government and local and national fair housing agencies in 2017. Over half of the complaints were based on disability, followed by race at 20 percent.

But these numbers reflect only reported incidents. The NFHA estimates that over 4 million instances of housing discrimination occur annually, but many people don’t realize they’ve been discriminated against – or know what steps to take when it happens.

What does housing discrimination look like?

Most of the people you encounter in your home search, including real estate agents, sellers, landlords, property management companies and lenders, are bound to Fair Housing Act regulations and additional state and local laws, based on where you live or are looking to live.

Fair Housing Act violations can occur in all phases of buying and renting, including in advertising, while you search, throughout the application process, in financing or credit checks, and during eviction proceedings.

Here are a few examples of discrimination people in protected classes have encountered:

  • A real estate agent tries to “steer” a buyer away from a certain neighborhood
  • A landlord tries to avoid renting to someone by saying the unit advertised has been rented when it hasn’t
  • A property management company refuses to rent to a family with children or requires a higher deposit
  • A landlord evicts a person of color for a reason they wouldn’t evict a white tenant for
  • A mortgage broker asks questions or requests excessive documentation from an immigrant couple that they wouldn’t request from another buyer
  • A lender charges a single woman a higher interest rate than what her credit score should dictate
  • A landlord refuses to make reasonable accommodations for a tenant who is disabled

What do I do if I’ve been discriminated against?

If you’ve been discriminated against in any of the ways above, or if you suspect that other actions taken by a property manager, landlord, real estate agent, broker or lender may be discriminatory, there are many resources at your disposal.

  1. File a report: File a complaint with the Department of Housing and Urban Development (HUD) at HUD.gov. You can also file a complaint with local housing resources found through the NFHA.
  2. Get more info from local housing agencies: You can find a list of local housing counselors at HUD.gov. Besides answering questions about discrimination claims, these agencies provide home buyer education workshops, pre-purchase counseling and rental housing assistance.
  3. Talk to an attorney: Like any other legal issue, when pursuing a complaint under the Fair Housing Act, it’s smart to consult a lawyer.
  4. Find people you can trust: If you experienced housing discrimination from your real estate agent, mortgage broker or lender, it’s time to find a new professional to help you in your home search. Ask friends, family members and colleagues for referrals they know, like and trust. Remember – these real estate professionals are working for you, so their only concern should be finding you the home that’s right for you.

Related:

Source: zillow.com

What Causes of Death are not Covered by Life Insurance?

The death of a loved one is hard to take and while a life insurance payout can ease the burden and allow you to continue leaving comfortably, it won’t take the grief or the heartbreak away. What’s more, if that life insurance policy refuses to payout, it can make the situation even worse, adding more stress, anxiety, anger, and frustration to an already emotional period.

But why would a life insurance claim be refused; what are the causes of death that may cause your life insurance coverage to become null and void? If you or a loved one has a life policy, this article could provide some essential information as we look at the reasons a death claim may be refused.

What Causes of Death are Not Covered?

The extent of your life insurance coverage will depend on your specific policy and this is something you should check when filing your life insurance application. Speak with your insurance agent, ask questions, and always do your due diligence so that you know what you’re buying into and what sort of deaths it will provide cover for.

Life insurance policies have something known as a contestability period, which typically lasts for 1 to 2 years and begins as soon as the policy starts. If the policyholder dies during this time, they will investigate and contest the death. 

This is generally true whether her you die of a heart attack, cancer or suicide. However, if this period has passed, they may only contest the death if it results from one of the following.

Suicide

Suicide is a contentious issue where life insurance is concerned. On the one hand, it’s a very serious issue and one that’s often the result of mental health problems, so there are those who believe it is deserving of the same respect as any other illness. 

On the other hand, the life insurance companies are concerned that allowing such coverage will encourage desperate people to kill themselves so their loved ones will be financially secure.

It’s a touchy subject, and that’s why many companies refuse to go anywhere near it. Some will outright refuse to pay out for suicide, but the majority have a suicide clause, whereby they only payout if the death occurs after a specific period of time.

If it occurs before this time, they may return the premiums or pay nothing at all. And if they have reason to believe that the policyholder took their own life just for financial gain, they will almost certainly investigate and may refuse to pay.

Dangerous Hobbies and Driving

If you die in a car accident and it is deemed that you were driving drunk, your policy may not payout. Car accident deaths are common, and this is a cause of death that policies do generally cover, but only when you weren’t doing something illegal or driving recklessly.

Deaths from extreme activities like bungee jumping or skydiving may be questioned, especially if these hobbies were not reported during the application. 

Illegal Acts

Your claim can be denied if you are committing an illegal act at the time of your death. This can include everything from being chased by the police to trespassing. A benefit may also be refused if you die for an intentional drug overdose using non-prescription drugs. 

Smoking or Pre-existing Health Issue

Honesty is key, and if you lie during the application or “forget” to tell them about your smoking status or pre-existing medical conditions, they may refuse to payout. It doesn’t matter if they performed a medical exam or not; the onus is not on them to spot your lie, it’s on you not to tell it in the first place.

This is one of the most common reasons for an insurance contract to be declared void, as applicants go in search of the cheapest premiums they can get and do everything they can to bring those costs down. They may also believe they will get away with their lies, either because they will give up smoking in a few months or years or because they will die from something other than their preexisting condition.

But lying in this manner is risky. You have to ask yourself whether it’s worth paying $100 a month for a valid policy that will payout without issue or $50 for a policy that will likely be refused and will cause endless stress for your beneficiaries.

War

Life insurance benefits generally don’t extend to the battlefield. If you’re a solider on the front line, your risk of death increases significantly, and many insurance policies won’t cover you for this. This is true even if you’re not in active duty at the time you take out the policy. More importantly, it also applies to correspondents and journalists.

You don’t invalidate your policy by going to a war-torn country and reporting, but if you die resulting from that trip, your policy will not payout.

Dismemberment

Your life insurance policy likely won’t pay for dismemberment or critical illness, but there are additional policies and add-ons that will provide cover. You can get these alongside permanent life insurance and term life insurance to provide you with more cover and peace of mind. 

They will come at a significant extra cost, but unlike traditional life insurance, they will payout when you are still alive and may make life easier after experiencing a tragic accident or serious illness.

We recommend focusing on getting life insurance first, securing the amount of coverage you need from a permanent or term life policy, and only then seeing if there is room in your budget for these additional options.

How Often Do Life Insurance Policies Payout?

We have recommended life insurance many times at PocketYourDollars and will continue to do so. We often state that it is essential if you have dependents and want to ensure they’re cared for when you die. But as much as we recommend it and as simple as the process of applying often is, there is one simple fact that we often overlook:

Life insurance companies rarely payout.

It’s a stat you may have seen elsewhere and it’s 100% true. However, contrary to what you might have heard or assumed; this is not the result of a refusal to pay the death benefit when the policyholder passes away. Sure, this accounts for some of those non-payments, but for the most part, it’s down to one of the following:

The Policyholder Survives the Term

The majority of life insurance policies are set to fixed terms, such as 10, 20 or 30 years. If anything happens during this period of time, your loved ones collect your death benefit, but if you survive, the policy ends, no money is paid out, and if you want another policy you will need to pay a larger sum.

The Policyholder Accepts the Cash Value

Whole life insurance policies are like investments crossed with life insurance. Your loved ones get a death benefit if you die, but it also accrues interest and can be cashed out. When this happens, the insurer collects, you get a sum of money, and it feels like a win-win, but in reality, the insurer has just dodged a bullet.

The Policyholder Stops Making Payments

As soon as you stop making your premium payments, you lose cover and you run the risk of your policy being canceled. This is true for pretty much any type of policy and it happens regardless of the policy term. 

Unlike a credit card company, which may chase you for payments, a life insurance company will place the burden of responsibility on you. After all, a creditor loses money when you don’t pay, whereas a life insurance company comes out on top.

This often happens when individuals take out substantial life insurance policies at a young age, only to suffer drastically changing circumstances. Imagine, for instance, that you’re 20-years-old and you buy a house with your spouse-to-be, with a view to settling down and starting a family. You assume that you’ll need it for a long time, so you take out a 30-year-term.

But 10 years down the line, your spouse leaves you, the family you wanted didn’t happen, and you’re all alone with no dependents, and with growing debts, bills, and obligations. At that point, life insurance becomes a burden, so you may stop making payments, thus allowing the insurance company to profit from 10 years of insurance premiums.

Summary: It’s Not That Cut-Throat

You don’t have to look far to find consumers who feel they have been wronged by life insurance companies, consumers who will expend a great deal of time and effort into calling out these companies for their perceived wrongdoings. But they often exaggerate the situation due to their extreme anger and this creates unrealistic anxieties and expectations.

The truth is, while there are people who have been genuinely wronged, they are in the extreme minority. The vast majority of family members who were refused a death benefit were let down by the policyholder and by the lies they told on their policy.

Policyholders lie about their weight, smoking status, and medical conditions, and when caught up in this lie, they often claim they made an honest mistake. But the truth is, most life insurance companies will overlook simple mistakes and only really care when it’s obvious that the policyholder lied. 

And let’s be honest, it doesn’t matter how forgetful you are, you’re not going to forget that you’re a chain smoker, alcoholic, drug user, extreme sports fan or that you recently had a medical crisis!

If the policy was filed honestly, you shouldn’t have an issue when you collect, even if it’s still in the contestability period. As discussed above, life insurance companies stack the dice in their favor. They use statistics and probability to carefully set the premiums and benefits, and they rely on policyholders forgetting to pay and outliving the term. They don’t need to “rob” you in order to make a profit. So, be honest when applying and you won’t have anything to fear.

What Causes of Death are not Covered by Life Insurance? is a post from Pocket Your Dollars.

Source: pocketyourdollars.com

State Farm Auto Insurance Review

Key takeaways:

  • State Farm is the number one auto insurer in America
  • State Farm offers rideshare insurance, which can be added to a personal auto insurance policy, keeping their customers safe during work and pleasure.
  • State Farm offers programs like the Steer Clear driving course for drivers under the age of 25 as well as Drive Safe and Save, which is a device that awards you for good driving.
  • The company provides a long list of discounts to help get the lowest rates for policies, as well as a mobile app that allows you to shop for insurance, pay bills, and file claims right on their mobile app.

We all know about Jake from State Farm, wearing khakis at three in the morning, and the famous motto, “like a good neighbor, State Farm is there”. Those famous commercials have built a strong following for State Farm, but commercials aren’t the only reason State Farm is the number one company for auto insurance. State Farm offers a large selection of products and services, all sold by the company itself, as well as a wide range of discounts to help you get the best rate.

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About the Company

State Farm is the largest auto insurance provider, based on direct premiums written, with 16.2% of all auto insurance in force in the U.S. The company has more than 83 million accounts, with over $40 billion in direct premiums written.

Although the company offers a large variety of other services, their main product is car insurance. In this review, we’re going to focus on State Farm car insurance, and also spend some time on their home insurance offerings.

State Farm Car Insurance

Basic features of State Farm car insurance are as follows:

  • Availability: All 50 states, plus the District of Columbia
  • Covered vehicles: Autos, classic cars, snowmobiles, motorcycles, RVs, recreational vehicles, ATVs/UTVs, campers, dune buggies, golf carts, trailers, mobile homes, and boats
  • Customer support: 24/7, 365 days a year by phone
  • Claims satisfaction: According to the JD Power 2020 US Auto Claims Satisfaction Study (released in October, 2020), State Farm ranks #6 out of 24 companies providing car insurance nationwide. They score 881 out of a potential 1,000 points, which is above the industry average of 872.
  • Financial strength rating: A++ (Superior)
  • Better Business Bureau ranking: Not Rated

How to Sign Up with State Farm Car Insurance

Signing up for State Farm can be done online or by phone, as well as finding your local State Farm office and getting a quote in person.

Much like other insurance quotes, State Farm’s application requires basic information as well as your driver’s license number or social security number to get a quote. The application will also require either an email address or phone number from the applicant.

If you prefer live contact, State Farm has a network of offices and agents across the country to walk you through the application process.

Unique Features

State Farm is number one for a reason, and although they don’t always have the lowest rates, they do offer a long list of discounts as well as great customer service. Here’s what makes State Farm so great:

  • Large number of discounts: State Farm offers many discounts for any policy.
  • Accident-Free Discount: Discounts can be applied to your policy if you go three or more years without any accidents or claims.
  • Accident forgiveness: Offered to customers who’ve been with the company for 9 years and have no accidents.
  • Drive Safe and Save: A device in your car that allows you to keep track of your driving through the State Farm app, savings vary based on how well you score.

State Farm Auto Insurance Coverage Options

State Farm offers standard auto insurance coverage provisions.

  • Bodily injury and property liability coverage.
  • Collision and comprehensive coverage.
  • Uninsured and underinsured liability coverage.
  • Medical payment and personal injury protection coverage.

Optional coverage provisions include the following:

  • Rental car reimbursement and travel expenses: Your car must be undriveable in order to qualify, and you’ll receive reimbursement for a rental car while your vehicle is in the shop being repaired as well as up to $500 in travel expenses.
  • Rideshare coverage: Extends from your regular auto insurance policy and provides coverage when you’re logged into your ridesharing app and waiting for a trip request or if you’re a driver waiting for a customer.
  • Roadside assistance: Includes towing, lockout service, delivery of gas, oil, battery, or a flat tire change, and up to one hour of mechanical labor at the breakdown site.
  • Drive Safe and Save: Provides a score of how well you drive and discounts your premium based on your score.

NOTE: State Farm does not offer GAP insurance however, they do offer a Payoff Protector. If you have an auto loan through State Farm, the benefit covers the outstanding principal balance if your car is totaled or stolen. Otherwise you will need to obtain gap coverage from the dealer or lender on your vehicle.

State Farm Discounts

State Farm offers one of the most extensive lists of discounts in the auto insurance industry.

Below is a list of the discounts they offer, and the average premium savings you can expect:

  • Passive Restraint: varies (airbags, seatbelts, etc.)
  • Anti-Theft System: varies
  • Drive Safe and Save: up to 30%
  • Drivers Training: varies (under age 21)
  • Good Driver: varies (three or more years accident- and claim-free)
  • Defensive Driving: 10-15%
  • Good Student: 25%
  • Multi-Vehicle: 20%
  • Multi-Policy: 17%
  • Student Away at School: varies (under age 21)
  • Steer Clear: 15% (under age 25)

Sample Premiums

To provide reasonable estimates of State Farm car insurance premiums, the table below presents semi-annual premiums for four drivers under six scenarios each. We’ve obtained these through direct quotes from the State Farm website.

Three quotes are based on liability amounts. Liability limits are expressed in a three-number sequence that looks like XX/XX/XX. The first number in the sequence is the amount of coverage for an injury to one person in an accident that’s determined to be your fault. The second number is the coverage limit for all injured parties in a single accident, while the third is coverage for property damage to other people’s property.

The limits we’ve used in our table are as follows:

1. 30/60/25 (the minimum coverage allowed in Texas)

2. 50/100/50

3. 100/300/100

In addition, the table also presents each liability coverage amount with uninsured and underinsured motorists, as well as collision and comprehensive coverage added to the basic liability policy.

We got quotes for four individual driver profiles, including a 23-year-old male, a 23-year-old female, a 53-year-old male, and a 53-year-old female. All four live in suburban Houston, Texas (Zip Code 77009), and drive a 2018 Toyota Camry 12,000 miles per year. None of the drivers has a moving violation or at-fault accident claim in the previous three years.

For simplicity’s sake, each driver is single, rents their home and has a college degree.

Here are the results:

Coverage / Driver Profile Male, 23 Female, 23 Male, 53 Female, 53
Rate for State Minimum –30/60/25 – Liability Only $434 $360 $273 $274
With Un/Under-insured Motorist and Collision & Comprehensive  $1,083  $922  $685  $685
50/100/50 – Liability Only  $472  $391  $297  $297
With Un/Under-insured Motorist and Collision & Comprehensive  $1,189  $967  $724  $724
100/300/100 – Liability Only  $512  $423  $322  $322
With Un/Under-insured Motorist and Collision & Comprehensive  $1,199  $1,024  $772  $772

NOTES: These are simplified quotes. For example, each driver’s credit history is not considered. Neither are certain optional coverages, like car replacement rental, roadside assistance, or GAP coverage for the payoff of a loan or lease.

Who State Farm Is Best For

Driver profiles and situations will vary, but State Farm may be the right choice for you if any of the following apply:

  • State Farm is the lowest-cost provider in your state for your driver profile.
  • You participate in ridesharing activities.
  • You have multiple drivers and vehicles that will qualify for several volume discounts.
  • You prefer dealing with a live agent, rather than an all-online experience.
  • You need multiple insurance policy types that you want to keep with one company.

State Farm vs. Other Car Insurance Companies

The table below compares State Farm with three of the most popular auto insurance providers in the country: Progressive, Geico, and Allstate. We’ve used side-by-side comparisons of three popular coverage levels, as well as the claims satisfaction and financial strength rating for each company.

Category / Company State Farm Progressive Geico Allstate
Average Annual Premium: State Minimum $500 $516 $464 $756
Average Annual Premium: 50/100/50 with Collision & Comprehensive $1,190 $1,106 $1,006 $1,754
Average Annual Premium: 100/300/100 with Collision & Comprehensive $1,380 $1,346 $1,222 $2,140
J.D. Power Claims Satisfaction Rating 881/1,000 856/1,000 871/1,000 876/1,000
A.M. Best Financial Strength Rating A++ (Superior) A+ (Superior) A++ (Superior) A+ (Superior)

The company that you feel will work best for you will depend on your own driver profile, your state of residence, and the specific needs and preferences you have for your policy.

SOURCE: Average Cost of Car Insurance in 2021 from The Zebra

What To Know About Auto Insurance

You’ll want to make sure that the coverage you carry matches your net worth. Cutting corners on price and coverage can leave you in financial ruin. If you find yourself in an accident, a lower premium may not provide you with enough coverage. Below are some things to look for when shopping around for a premium.

  • Keep sufficient coverage: State minimum may not be enough coverage, especially if you’re a higher risk driver or you drive a newer, more expensive car.
  • Clean credit: Insurers will look to your credit score when it comes to your premium. If you have a higher score, it’s more likely you’ll get a lower rate.
  • Add important coverage options: Although most states require insurance, some people still drive without it, or an insufficient amount of it. Optional provisions like uninsured/underinsured motorists can protect you if you’re in a situation with either type of driver.
  • Deductible: Larger deductibles will lower your rate, but don’t choose a deductible unless you’re sure you can pay it upfront for a claim.
  • Discounts: Most insurers offer discounts, find out from each company about any and all that apply to you.
  • Shop around: Get quotes from several companies to compare coverage and premium.

State Farm Home Insurance

State Farm ranks Number 1 in homeowner’s insurance. Although the company has fewer discounts than other home insurers, they still offer the same types of coverages.

  • Availability: all 50 states

Basic Home Insurance Coverage

State Farm home insurance policies provide the following basic homeowner coverage types:

  • Dwelling: Covers damage to your home as well as loss of your home in the event of an incident.
  • Personal possessions: Protects against damage, theft, and destruction of your personal items.
  • Loss of use: Provides coverage for living expenses, like lodging, if you’re unable to stay in your home.
  • Medical Payments: Covers medical bills for someone injured on your property.
  • Liability: Much like auto insurance, this provision offers protection for bodily injury and property damage against someone that you’re at-fault for.

Home Insurance Discounts

State Farm’s home insurance discounts are similar to those available for car insurance, and include:

  • Bundle home and auto
  • Sprinkler system discount
  • Security device discount
  • Damage resistant roofing material discount

State Farm Home Insurance Ratings & Average Premium

  • Claims satisfaction: Scored 880 out of 1,000 points 2021 US Property Claims Satisfaction Study, ranking #13 among18 companies nationwide.
  • Financial strength rating: A++ (Superior) by A.M. Best.
  • Average homeowner’s insurance premium: $1,296 (SOURCE: The Zebra)

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Make sure that both investments are protected at all times while you save money. Click below to get a free quote.

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How to Sign Up with State Farm Home Insurance

Much like a State Farm car insurance quote, you’ll complete the application process for home insurance online. If you prefer, you can call a toll-free number or go to a local office.

Other Services Offered by State Farm

Listed below are the other products and services that State Farm provides.

  • Pet insurance (through Trupanion)
  • Disability (long and short term)
  • Life insurance (term, whole, universal, change policy and beneficiary)
  • Small business insurance (owner, commercial, contractors, workers comp., liability umbrella, bonds)
  • Liability (business, professional, personal)
  • Health insurance (individual, supplemental, Medicare)

If any of the above situations apply to you, you may want to discuss it with a State Farm representative when adding it to your auto insurance policy, or if you already have a policy with them.

The Bottom Line

State Farm covers more than 16% of all drivers in the country, as well as being number one in life insurance and homeowner’s insurance. With such high ratings in customer satisfaction and customer service, it’s hard not to give them a chance. When searching for any kind of insurance, State Farm should be among the companies you look to for a quote.

State Farm FAQs

Is State Farm good car insurance?

State Farm is the biggest auto insurer in the country. Customers are typically drawn to a company by a combination of quality and affordability, so this speaks volumes about State Farm. They offer a wide range of insurance policies, including life, health and business insurance, which makes it easier for consumers to keep all their insurance coverage with the same company.

Is State Farm the cheapest insurance?

State Farm is not always the cheapest, though they are the lowest in some states. But car insurance should never be purchased based on premium alone. You need to evaluate the cost of a policy against the quality of coverage being provided. State Farm comes up strong in those comparisons.

Is State Farm good at paying claims?

State Farm ranks sixth in the nation on customer claims satisfaction, according to the J.D. Power 2020 US Auto Claims Satisfaction Study cited earlier. That’s no small advantage, given the large number of auto insurance companies in the country. You can generally expect a good claims experience with State Farm.

The post State Farm Auto Insurance Review appeared first on Good Financial Cents®.

Source: goodfinancialcents.com

Do I Need Long-Term Care Insurance?

Inscription: long-term care insurance

A 65-year-old person today has nearly a 70% chance of requiring long-term care services at some point, according to the Administration for Community Living (ACL) and the Administration on Aging (AOA). Of that group, 20% will need it for over five years. So, chances are, you may also need this type of service down the line. But how will you pay for it? A long-term care insurance policy is one method to help lessen the bite of care costs. Here’s how.

Consider working with a financial advisor as you prepare for the possibility that you will need to be able to pay for long-term care.

What Is Long-Term Care Insurance?

To put it briefly, long-term care insurance helps cover the costs of long-term care services, such as in an assisted living facility. Other places where a long-term care policy will reimburse you include an adult day care center, a nursing home and your own home.

Generally, eligibility starts when you can no longer perform, independently, two of the six activities of daily living (ADL): mobility, which may include being able to transfer between a wheelchair and bed; bathing or showering; using the lavatory; maintain bladder and bowel control; dressing; and eating. Then you can take advantage of a wide range of aid.

Typical health insurance doesn’t cover these types of costs. And both Medicare and Medicaid have limitations, making them unreliable for the average person’s long-term care.

Even long-term care insurance policies require you to pay for services out of pocket up to a certain amount of time. Afterward, the insurer begins to reimburse you. Policies may pay up to a daily limit, with a maximum lifetime limit as the cap. However, couples may get around that by using a shared care option. With this, you can pool benefits.

The rate you pay for the policy will depend on multiple factors, including your age, marital status, gender, health, coverage level and insurer.

What Does Long-Term Care Insurance Cover?

What type of long-term care long-term insurance covers depends on the policy you buy.

However, these policies are comprehensive and will cover the expenses that Medicare doesn’t. Costs that it pays for include:

  • In-home care
  • Care coordination
  • Assisted living facilities
  • Nursing home care
  • Adult day care services
  • Home modification

They may also include paying for assistance with ADLs, like bathing.

Additionally, it may cover stays in hospice care or respite care. Hospice care is generally short-term and provides emotional and physical support for the terminally ill and their families. In contrast, respite care or temporary care, gives primary caregivers a break by offering care through other facilities or professionals. While these two services address two different needs, policyholders can receive help paying for either.

Keep in mind, though, long-term care coverage doesn’t pay for everything. It’s designed for custodial care, not medical care costs. Certain factors may also affect your eligibility, such as a pre-existing medical condition, such as dementia or Parkinson’s disease.

It’s up to you to decide how much coverage you need and how much you can afford. It’s crucial that you purchase within your budget. But you still want a sufficient amount of benefits to support you while you age.

Reasons to Get Long-Term Care Coverage

Consider the variety of insurance policies you already own. From homeowners to auto to life, you probably have multiple reasons why you purchased them. Likewise, there are several reasons that people see the value in long-term care coverage. Here are some ways it might impact your life for the better.

Preserves your assets

While you can get an estimate, it’s hard to pinpoint the exact price you’ll pay for long-term care. While you can find estimates, such as through the Genworth Cost of Care Survey tool, the guesswork makes it difficult to save enough.

In addition, relying on Medicare or Medicaid could leave you at a financial loss. Medicare won’t help with the costs of permanent and ongoing care. Likewise, Medicaid has its limitations, namely its income guidelines and the level of care needed to qualify.

An insurance policy ensures you don’t have to drain all your savings to be eligible for financial help. And, it takes the financial burden off of your family by safeguarding some of those remaining retirement assets.

Creates care options

Handicapped woman in a wheelchair outside

We all have an ideal future as we age. Purchasing a long-term care insurance policy ensures you have a safety net installed into your financial plan. It can be incredibly costly to pay for long-term care out of pocket. And while Medicaid can help pay for specific costs, such as nursing home care, when you’re out of savings, it won’t pay for everything. For example, it doesn’t always cover assisted living options or home-based care.

Long-term care insurance ensures you can pay for the type of care you want and need when the time comes. You can use it to supplement the savings you already have.

Protects your family

Naturally, most of us would like to stay in our own homes throughout our senior years. But with the likelihood of needing long-term care, that can put a strain on our loved ones. As a result, family members, partners and friends often take on the caregiver role, which can be difficult. According to the American Association of Retired Persons’ (AARP) data, one in three caregivers provides care completely alone. Many of which go unpaid despite caring for recipients with complex support and medical needs.

If you’re considering long-term care insurance, think about the future you see for yourself and your potential caregiver. What does the impact look like on their life? There will be financial and emotional burdens in addition to the work.

By purchasing a policy, you ensure there are some finances to pay for outside help. That takes a weight off of your shoulders and and those of your loved ones as well.

How to Buy Long-Term Care Coverage

The options available to you may vary. Some employers offer their employees the opportunity to buy a long-term care policy through their workplace. Occasionally, this comes at a discounted group rate from their broker. While you may have to answer a few questions about your health to qualify, it may be easier or less expensive than purchasing a policy on your own.

Otherwise, you can buy coverage directly through an agent or insurance company.

If you’re shopping for a policy, remember to get several quotes from varying companies. That way, you can compare your pricing options. Comparison shopping is important, regardless of whether you purchase independently or through work. The discount that may come with an employer’s plan may be nice, but it’s still possible to find competitive rates.

It’s also advisable to work with an independent long-term care insurance agent who can sell products from various carriers. From there, it’s a matter of finding a policy to fit your needs.

Do I Need Long-Term Care Coverage?

Every person’s situation is different. If you have very little funds during your senior years, you may qualify for Medicaid. This option may offer fewer choices, but it does provide funding for low-income individuals. On the other hand, if you have more than enough savings, it might be better to pay out of pocket instead.

However, if you fall between the two ends of the financial spectrum, then long-term care insurance may be worth consideration. It protects your retirement savings from pricey and unexpected medical costs, ensures choice in care and offers you and your family peace of mind.

Additionally, think about the lifestyle you live. For example, if you have no one you can rely on as a caregiver then you likely need the option of a facility. Or, if you’re a woman, you’ll likely live longer and need longer care as a result. On average, women need 3.7 years of care, whereas men only need 2.2, according to the ACL.

The Bottom Line

Happy senior coupleLong-term care is incredibly expensive. Genworth estimates that the median costs for in-home care, assisted living facilities and nursing home facilities all exceed $50,000 per year. As a result, it’s wise to evaluate how you would pay for your potential long-term care needs. A long-term care insurance policy is just one method. While it offers financial and emotional protection, it may still be an additional cost you’re not prepared to pay.

Long-Term Care Planning Tips

  • Long-term care comes with millions of questions. You can address them with an experienced financial advisor. SmartAsset’s free matching tool makes it easy to find a qualified, local professional, too. Simply answer a few questions and in no time you have up to three advisors who can guide you through your process. If you’re ready to tackle financial planning, get started now.
  • Planning for long-term care is crucial to any financial plan. A high percentage of Americans will likely need this vital service at some point. So, review SmartAsset’s guide to creating a financial plan to make sure yours includes that possibility.

Photo credit: ©iStock.com/syahrir maulana , ©iStock.com/vgajic, ©iStock.com/Instants

The post Do I Need Long-Term Care Insurance? appeared first on SmartAsset Blog.

Source: smartasset.com

3 Things to Do When Your Neighbors List Their Home for Sale

Most people think their real estate concerns end once they’ve closed on and moved into their new homes. But when a neighbor’s house goes on the market, there can be some important implications for you.

Here are some tips for staying real estate aware.

1. Document important disclosure items

For the most part, good fences make good neighbors. But sometimes the folks on the other side of the fence don’t cooperate, and unresolved neighbor conflicts tend to arise when one of the homes goes on the market.

Have a property line dispute? Or an issue with a broken fence and you want the new buyer to know about it? While sellers in most states have a duty to disclose issues to potential buyers, not all areas require this.

Do your new neighbor-to-be a favor and alert the seller’s agent to anything the buyer needs to know about your neighbor’s property.

2. See things differently

Open houses allow buyers to spend some time exploring a home, but these events also present you with a chance to see your home from your neighbor’s perspective.

Once at a busy open house in San Francisco’s Noe Valley neighborhood, an open house visitor made a somewhat obvious beeline for the back of the house. He immediately got on the phone and started talking with someone about where he was standing, giving orders to move left and right.

It turned out this visitor lived in the home behind, and he was checking to see the neighbor’s view into his home.

The open house is your chance to check your home’s paint job from the neighbor’s yard or simply to see your home from a different perspective.

3. Know and learn the market in real time

Typical sellers claim and save their home online, but they also keep searches going after the fact. Why? To keep tabs on the market, see the comps and have a real-time sense of what’s happening nearby.

Just like when you were a buyer, knowing about the area and types of homes in the market is a good move for any homeowner. Take a neighboring home for sale as an opportunity to see what the market bears. You can also learn about the latest trends in home design.

Speaking to a real estate agent can keep you informed of changes to property taxes or how assessments are changing in your town. A smart real estate agent, working their listing, will be an incredible resource to would-be clients down the road. Leverage their experience when your neighbor sells.

Take note when your neighbor goes to sell their home. It’s not just a time to nose around, but to document, inspect or learn from the home sale. Some homes get listed once in a lifetime – take advantage of the opportunity.

Related:

Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow.

Originally published October 31, 2016.

Source: zillow.com

Best Online Life Insurance of 2021

A few decades ago, most life insurance sales took place through an agent, and you definitely had to endure a medical exam for coverage to begin. But since online life insurance has turned the entire process upside down, you can now buy digital life insurance plans without leaving your home. With some providers, you can even get coverage as soon as the next business day.

These benefits and others are part of the reason online life insurance is growing in popularity. According to the Insurance Information Institute (III), the percentage of consumers who preferred online life insurance to in-person sales grew from 17% in 2011 to 29% in 2020. 

If you’re in the market for life insurance and you want to avoid working with an agent who might try high-pressure sales techniques, the best online life insurance companies are worth considering.

To help you in your search, we compared the top companies in this space in terms of their offerings, processes, and ratings for financial strength. The best online life insurance companies include Bestow, Haven Life, Sproutt, and Legal & General Life Insurance, and we review all of them below.

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Most Important Factors for Online Life Insurance

  • Free online quote: Buying life insurance online means not having to deal with an agent or their high-pressure tactics. With that in mind, we only selected companies that offer free online life insurance quotes for our ranking. 
  • Strong ratings for financial strength: We also looked at providers based on their ratings for financial strength from AM Best. 
  • Potential for no medical exam: Some online life insurance companies use advanced algorithms to approve you for life insurance without a medical exam. 
  • Flexible options: Online life insurance companies tend to offer consumers flexibility in their plans, including the ability to tailor their coverage to their needs.
  • Low premiums: Finally, online life insurance should absolutely have affordable monthly premiums that can fit into any budget. With a free online quote process, they should also make it easy to shop around and compare. 

The 4 Best Online Life Insurance Companies of 2021

To come up with the providers in this ranking, we looked at dozens of companies based on the features listed above. Ultimately, we found that the following four online life insurance providers offer some of the best options, reasonable pricing, and transparency all along.

Bestow made our ranking due to the fact they offer an easy online quote process and no medical exams ever. Haven Life has a similar process and the potential for no medical exams, and their term policies can come in amounts up to $3 million.

We chose Sproutt for our ranking since they offer a robust online insurance marketplace that lets you compare options and pricing all in one place. Finally, Legal & General Life Insurance made the cut due to their low advertised rates. With Legal & General Life Insurance, you can reportedly buy term life insurance coverage for as little as $7 per month. 

In summary, here are the best online life insurance providers of 2021, as well as the categories they stand out in: 

  • Bestow: Best for no medical exam requirement
  • Haven Life: Best for quick coverage
  • Sproutt: Best comparison site
  • Legal & General Life Insurance: Best for affordable premiums

Online Life Insurance Reviews

Our detailed reviews explain more about each of the best life insurance companies and what they have to offer.

Bestow

Bestow is one of the top providers of online life insurance, and it’s easy to see why. This company makes it incredibly easy to get an online quote without providing any personal information, and they offer term life insurance in amounts that range from $50,000 to $1.5 million. 

You also get to tailor your coverage to your needs, with terms available in five-year increments from 10 years to 30 years. Bestow policies also use advanced algorithms to approve you for coverage, so you won’ t have to go through a medical exam. 

Term coverage from Bestow is backed by North American Company for Life and Health Insurance® — an A+ rated insurer. Its policies are also reinsured by highly-rated Munich RE, so you can rest assured your coverage will be there if you need it.

According to Bestow, premiums for its term life insurance coverage start at just $10 per month.

What Holds It Back: Bestow policies are only available to individuals who are ages 18 to 60. This provider might not be a good option if you need life insurance during your golden years. Also, people with a felony conviction aren’t eligible and will need to buy coverage elsewhere.

Finally, it’s worth noting that Bestow policies don’t have any options for riders. If you want to customize your coverage with riders for accidental death, an accelerated death benefit, or any other situation, you’ll need to look for another provider. 

Haven Life

Haven Life made our ranking due to its flexible coverage options, including policies worth up to $3 million. Best of all, you can apply for coverage with Haven Life and begin your policy as soon as the next business day.

This provider offers two different kinds of term life insurance:

  • Haven Simple policies, which are fully digital with no medical exam, and 
  • Haven Term coverage which offers higher limits and may or may not require a medical exam. 

Both types of policies are underwritten by highly-rated insurers, including Mass Mutual and C.M. Life Insurance Company, a subsidiary of MassMutual. Haven Life also offers affordable premiums to those who qualify. According to the insurer, a $250,000, 20-year Haven Term policy starts at just $14.99 per month depending on your age and other factors. 

What Holds It Back: Although Haven Life offers affordable term coverage, its Haven Simple plan with no medical exam does come with limitations. For example, you must be 20 to 55 years old to be eligible, and you can’t live in the following states: CA, DE, SD, ND or NY. Haven Simple policies are only available in five-year, 10-year, or 15-year terms, and the maximum coverage you can buy is $500,000. 

Sproutt

Sproutt Life Insurance is a little different because it’s an insurance marketplace, meaning you can compare plans across multiple insurance providers. This company also focuses on your total health, and it provides life insurance options that are optimized based on your lifestyle and your health-related goals. 

Since Sproutt is an independent broker, however, you’ll have to do some research on the companies that offer you policies once you apply for a quote. That said, this online comparison site lets you compare pricing and policies from multiple providers in one place, including options with and without a medical exam. 

We also like the fact that Sproutt has a 20-day money-back guarantee on all its policies, and the fact that many include an accelerated benefit rider at no cost. You can also convert its term policies to permanent coverage later on. 

What Holds It Back: One big downside of working with Sproutt is the fact that you have to provide an array of personal data to get a free quote, including how often you exercise, what you like to eat, and more. Since this is an insurance marketplace, you should also be aware that Sproutt doesn’t actually issue life insurance policies themselves. 

Legal & General Life Insurance

Legal & General Life Insurance made our ranking due to the low premiums they advertise, which start at $7 per month. You can apply for a free quote online or over the phone with very little personal information. In addition to term life insurance, Legal & General also offers universal life insurance and annuities that provide lifetime income. 

Interestingly, Legal & General lets you apply for up to $10 million in life insurance coverage on its website, and it lets you choose your coverage length from a variety of timelines that last for up to 40 years. This company also boasts an A+ rating for financial strength from AM Best, and it currently has 1.3 million U.S. life insurance customers. 

Although some policies from Legal & General might require a medical exam, it does offer policies with no medical exam to eligible applicants. This is due to its accelerated underwriting process, which lets you apply for life insurance and get coverage within a matter of days or even the same day. 

What Holds It Back: One downside of Legal & General is its wonky free quote tool. You can find out how much you would pay for a life insurance policy online, but you can’t change your quote to compare pricing for different coverage amounts or term lengths. 

If you want to compare pricing among different coverage options, you have to apply for a new life insurance quote each time. 

Other Life Insurance Options to Consider

As you compare life insurance quotes, make sure you’re only looking at companies with excellent financial ratings and a strong online presence. In addition to the companies that made our ranking, we suggest comparing quotes from companies like Ladder, AIG, American National, and National Family Assurance. 

How We Found the Best Online Life Insurance Companies

While there are many companies who offer life insurance online, we looked at several important factors to find the absolute best. The following criteria was considered when compiling our list of the best online life insurance firms. 

Strong Financial Ratings

All the companies that made our ranking have excellent ratings for financial strength with the exception of Sproutt, which is an insurance marketplace that does not offer their own policies. Generally speaking, we looked for companies that have policies underwritten by A+ insurers.

Option for No Medical Exam

While some of the providers that made our ranking may require medical exams for some of their policies, we only included online insurance companies that offer life insurance policies with no exam required. 

Flexible Coverage Options

We also looked for companies that let you tailor your coverage to your needs, including the amount of life insurance you buy and how long you want your policy to last. 

Online Quote

Finally, we only considered online life insurance companies that let you get a quote online and without speaking with an agent. We also looked for companies that offer free quotes without collecting your contact information.

What You Need to Know About Online Life Insurance

Online life insurance is the same as traditional life insurance, although you may find limited coverage options you can apply for with an online provider. For example, term life insurance is typically the only type of life insurance you can get without enduring a medical exam, and you may face coverage caps or limits as well.

If you plan to buy permanent life insurance, including whole life insurance, you will likely need to work with an agent.

Other details you should know about online life insurance:

  • With no medical exam, approval is gauged using advanced algorithms and proprietary data. This means the insurance company will use technology to estimate how much risk you pose as a customer, and they can approve you for a policy based on that information.
  • Many online life insurance companies are actually backed by large, reputable insurers. This should give you peace of mind if you want to make sure you’re buying reliable coverage but you have never heard of the companies in our ranking before.
  • Since online life insurance is available without having to speak with an agent, you’ll need to do some of your own research upfront. For example, you’ll need to decide the amount of life insurance you need and how long you want your plan to last.

Summary: Best Online Life Insurance Providers

Best For How to Apply
Bestow No Medical Exam Ever Apply Online
Haven Life Quick Coverage Apply Online
Sproutt Comparison Site Apply Online
Legal & General Life Insurance Affordable Premiums Apply Online

The post Best Online Life Insurance of 2021 appeared first on Good Financial Cents®.

Source: goodfinancialcents.com

In it For the Long Haul

Relentless Agent Award winner, Banny “Life-Changer” Lim, didn’t get his nickname from just helping his clients with their homes. It comes from his unique

Source: century21.com

Say What? Home-Buying Lingo You Should Know

DTI, PMI, LTV … TBH, it can be hard to keep all this stuff straight. This lexicon of real estate terms and acronyms will help you speak the language like a pro.

Appraisal management company (AMC): An institution operated independently of a lender that, once notified by a lender, orders a home appraisal.

Appraisal: An informed, impartial and well-documented opinion of the value of a home, prepared by a licensed and certified appraiser and based on data about comparable homes in the area, as well as the appraiser’s own walkthrough.

Approved for short sale: A term that indicates that a homeowner’s bank has approved a reduced listing price on a home, and the home is ready for resale.

American Society of Home Inspectors (ASHI): A not-for-profit professional association that sets and promotes standards for property inspections and provides educational opportunities to its members. (i.e., Look for this accreditation or something similar when shopping for a home inspector.)

Attorney state: A state in which a real estate attorney is responsible for closing.

Back-end ratio: One of two debt-to-income ratios that a lender analyzes to determine a borrower’s eligibility for a home loan. The ratio compares the borrower’s monthly debt payments (proposed housing expenses, plus student loan, car payment, credit card debt, maintenance or child support and installment loans) to gross income.

Buyers market: Market conditions that exist when homes for sale outnumber buyers. Homes sit on the market a long time, and prices drop.

Cancellation of escrow: A situation in which a buyer backs out of a home purchase.

Capacity: The amount of money a home buyer can afford to borrow.

Cash-value policy: A homeowners insurance policy that pays the replacement cost of a home, minus depreciation, should damage occur.

Closing: A one- to two-hour meeting during which ownership of a home is transferred from seller to buyer. A closing is usually attended by the buyer, the seller, both real estate agents and the lender.

Closing costs: Fees associated with the purchase of a home that are due at the end of the sales transaction. Fees may include the appraisal, the home inspection, a title search, a pest inspection and more. Buyers should budget for an amount that is 1% to 3% of the home’s purchase price.

Closing disclosure (CD): A five-page document sent to the buyer three days before closing. This document spells out all the terms of the loan: the amount, the interest rate, the monthly payment, mortgage insurance, the monthly escrow amount and all closing costs.

Closing escrow: The final and official transfer of property from seller to buyer and delivery of appropriate paperwork to each party. Closing of escrow is the responsibility of the escrow agent.

Comparative market analysis (CMA): An in-depth analysis, prepared by a real estate agent, that determines the estimated value of a home based on recently sold homes of similar condition, size, features and age that are located in the same area.

Compliance agreement: A document signed by the buyer at closing, in which they agree to cooperate if the lender needs to fix any mistakes in the loan documents.

Comps: Or comparable sales, are homes in a given area that have sold within the past six months that a real estate agent uses to determine a home’s value.

Condo insurance: Homeowners insurance that covers personal property and the interior of a condo unit should damage occur.

Contingencies: Conditions written into a home purchase contract that protect the buyer should issues arise with financing, the home inspection, etc.

Conventional 97: A home loan that requires a down payment equivalent to 3% of the home’s purchase price. Private mortgage insurance, which is required, can be canceled when the owner reaches 80% equity.

Conventional loan: A home loan not guaranteed by a government agency, such as the FHA or the VA.

Days on market (DOM): The number of days a property listing is considered active.

Depository institutions: Banks, savings and loans, and credit unions. These institutions underwrite as well as set home loan pricing in-house.

Down payment: A certain portion of the home’s purchase price that a buyer must pay. A minimum requirement is often dictated by the loan type.

Debt-to-income ratio (DTI): A ratio that compares a home buyer’s expenses to gross income.

Earnest money: A security deposit made by the buyer to assure the seller of his or her intent to purchase.

Equity: A percentage of the home’s value owned by the homeowner.

Escrow account: An account required by a lender and funded by a buyer’s mortgage payment to pay the buyer’s homeowners insurance and property taxes.

Escrow agent: A neutral third-party officer who holds all paperwork and funding in trust until all parties in the transaction fulfill their obligations as part of the transfer of property ownership.

Escrow state: A state in which an escrow agent is responsible for closing.

Fannie Mae: A government-sponsored enterprise chartered in 1938 to help ensure a reliable and affordable supply of mortgage funds throughout the country.

Federal Reserve: The central bank of the United States, established in 1913 to provide the nation with a safer, more flexible and more stable monetary and financial system.

Federal Housing Administration (FHA): A government agency created by the National Housing Act of 1934 that insures loans made by private lenders.

FHA 203(k): A rehabilitation loan backed by the federal government that permits home buyers to finance money into a mortgage to repair, improve or upgrade a home.

Foreclosure: A property repossessed by a bank when the owner fails to make mortgage payments.

Freddie Mac: A government agency chartered by Congress in 1970 to provide a constant source of mortgage funding for the nation’s housing markets.

Funding fee: A fee that protects the lender from loss and also funds the loan program itself. Examples include the VA funding fee and the FHA funding fee.

Gentrification: The process of rehabilitation and renewal that occurs in an urban area as the demographic changes. Rents and property values increase, culture changes and lower-income residents are often displaced.

Guaranteed replacement coverage: Homeowners insurance that covers what it would cost to replace property based on today’s prices, not original purchase price, should damage occur.

Homeowners association (HOA): The governing body of a housing development, condo or townhome complex that sets rules and regulations and charges dues and special assessments used to maintain common areas and cover unexpected expenses respectively.

Home equity line of credit (HELOC): A revolving line of credit with an adjustable interest rate. Like a credit card, this line of credit has a limit. There is a specified time during which money can be drawn. Payment in full is due at the end of the draw period.

Home equity loan: A lump-sum loan that allows the homeowner to use the equity in their home as collateral. The loan places a lien against the property and reduces home equity.

Home inspection: A nondestructive visual look at the systems in a building. Inspection occurs when the home is under contract or in escrow.

Homeowners insurance: A policy that protects the structure of the home, its contents, injury to others and living expenses should damage occur.

Housing ratio: One of two debt-to-income ratios that a lender analyzes to determine a borrower’s eligibility for a home loan. The ratio compares total housing cost (principal, homeowners insurance, taxes and private mortgage insurance) to gross income.

In escrow: A period of time (30 days or longer) after a buyer has made an offer on a home and a seller has accepted. During this time, the home is inspected and appraised, and the title searched for liens, etc.

Jumbo loan: A loan amount that exceeds the Fannie Mae/Freddie Mac limit, which is generally $425,100 in most parts of the U.S.

Listing price: The price of a home, as set by the seller.

Loan estimate: A three-page document sent to an applicant three days after they apply for a home loan. The document includes loan terms, monthly payment and closing costs.

Loan-to-value ratio (LTV): The amount of the loan divided by the price of the house. Lenders reward lower LTV ratios.

Market value coverage: Homeowners insurance that covers the amount the home would go for on the market, not the cost to repair, should damage occur.

Mechanic’s lien: A hold against a property, filed in the county recorder’s office by someone who’s done work on a home and not been paid. If the homeowner refuses to pay, the lien allows a foreclosure action.

Mortgage broker: A licensed professional who works on behalf of the buyer to secure financing through a bank or other lending institution.

Mortgage companies: Lenders who underwrite loans in-house and fund loans from a line of credit before selling them off to a loan buyer.

Mortgage interest deduction: Mortgage interest paid in a year subtracted from annual gross salary.

Mortgage interest rate: The price of borrowing money. The base rate is set by the Federal Reserve and then customized per borrower, based on credit score, down payment, property type and points the buyer pays to lower the rate.

Multiple listing service (MLS): A database where real estate agents list properties for sale.

Origination fee: A fee, charged by a broker or lender, to initiate and complete the home loan application process.

Piggyback loan: A combination of loans bundled to avoid private mortgage Insurance. One loan covers 80% of the home’s value, another loan covers 10% to 15% of the home’s value, and the buyer contributes the remainder.

Principal, interest, property taxes and homeowners insurance (PITI): The components of a monthly mortgage payment.

Private mortgage insurance (PMI): A fee charged to borrowers who make a down payment that is less than 20% of the home’s value. The fee, 0.3% to 1.5% of the yearly loan amount, can be canceled in certain circumstances when the borrower reaches 20% equity.

Points: Prepaid interest owed at closing, with one point representing 1% of the loan. Paying points, which are tax deductible, will lower the monthly mortgage payment.

Pre-approval: A thorough assessment of a borrower’s income, assets and other data to determine a loan amount they would qualify for. A real estate agent will request a pre-approval or pre-qualification letter before showing a buyer a home.

Pre-qualification: A basic assessment of income, assets and credit score to determine what, if any, loan programs a borrower might qualify for. A real estate agent will request a pre-approval or pre-qualification letter before showing a buyer a home.

Property tax exemption: A reduction in taxes based on specific criteria, such as installation of a renewable energy system or rehabilitation of a historic home.

Round table closing: All parties (the buyer, the seller, the real estate agents and maybe the lender) meet at a specified time to sign paperwork, pay fees and finalize the transfer of homeownership.

Sellers market: Market conditions that exist when buyers outnumber homes for sale. Bidding wars are common.

Short sale: The sale of a home by an owner who owes more on the home than it’s worth (i.e., “underwater” or “upside down”). The owner’s bank must approve a lower listing price before the home can be sold.

Special assessment: A fee charged by a condo complex HOA when cash on reserve is not enough to cover unexpected expenses.

Tax lien: The government’s legal claim against property when the homeowner neglects or fails to pay a tax debt.

Third-party review required: Verbiage included in a home listing to indicate that the lender has not yet approved the home for short sale. The seller must submit the buyer’s offer to the lender for approval.

Title insurance: Insurance that protects the buyer and lender should an individual or entity step forward with a claim that was attached to the property before the seller transferred legal ownership of the property or “title” to the buyer.

Transfer stamps: The form in which transfer taxes are paid by the home buyer. Stamps can also serve as proof of transfer tax payment.

Transfer taxes: Fees imposed by the state, county or municipality on transfer of title.

Under contract: A period of time (30 days or longer) after a buyer has made an offer on a home and a seller has accepted. During this time, the home is inspected and appraised, and the title is searched for liens, etc.

Underwater or upside down: A situation in which a homeowner owes more for a property than it’s worth.

Underwriting: A process a lender follows to assess a home loan applicant’s income, assets and credit, and the risk involved in offering the applicant a mortgage.

VA home loan: A home loan partially guaranteed by the United States Department of Veteran Affairs and offered by private lenders, such as banks and mortgage companies.

VantageScore: A credit scoring model lenders use to make lending decisions. A borrower’s score is based on bill-paying habits, debt balances, age, variety of credit accounts and number of inquiries on credit reports.

Walkthrough: A buyer’s final inspection of a home before closing.

Water certificate: A document that certifies that a water account has been paid in full. The seller must produce this certificate at closing.

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Source: zillow.com