Sunday, July 31, 2011

The Power of Choice

Choice -- it’s something we take for granted -- the ability to determine what’s best for us.  Our needs, our life, our choice.  In fact, choice is something we can’t even imagine doing without.  And yet when it comes to something as important as protecting ourselves, our property, our families, some people surrender choice without even knowing it, because they don’t choose an independent insurance agent.

Independent insurance agents can help you through the process of insuring your life, and give you the choices you want.  Triplett’s independent insurance agents don’t just work for one insurance company like many other agents do.  That’s why we can offer you a wide variety of coverage options, policies and prices to make sure that you’re getting what you want out of your insurance.  Come experience the Triplett difference today!

Minimize the Risk of Owning a Home

Not so long ago, in a not-so-distant land, owning a home was thought of as the safest "investment" around. Fast forward to the present day, and home ownership seems super scary to many people who can afford homes, and would like to own them, but are paralyzed by the fear of buying a lemon, or having a mortgage catastrophe.  Here are 4 simple steps to minimize the risk that you'll become the main character in a homeownership horror story.

1.  Stick with a fixed-rate mortgage.  Recent data shows that adjustable rate mortgages, or ARMs, are increasingly popular, rising from 9 percent of the mortgage market in the fourth quarter of 2010 to 12 percent in the first quarter of this year.  This might seem crazy to some, but in financially aggressive crowds, the lure of low, 3 percent(ish) interest rates on ARMs is enough to overcome any qualms.  As well, today's ARMs tend to have lower lifetime interest rate caps and require payment of principal, so they don't adjust as violently as the subprime interest-only and option ARMs that contributed to the foreclosure crisis.

If the thought of your mortgage payment changing over time gives you the shakes, you don't want to live in a state of interest rate obsession for the next few decades, or you simply crave the simplicity and predictability of knowing what your housing payment will be for the next 15, 20 or 30 years, then stick to 
a fixed-rate mortgage.  The rates are higher, but with a fixed-rate loan, the risk of scary payment changes are not only lower, they are non-existent. 

2.  Put - and keep - a home warranty in place.  One of the most frightening things about going from renter to homeowner is the prospect of being solely responsible for the care and feeding of your home and all its systems and appliances. Responsibility for both the costs and the actual logistics of repairing things like a leaky roof, a broken hot water heater or a haywire electrical fixture looms large in the minds of first-time buyers, in particular. 

A home warranty plan kicks in when escrow closes, and depending on the coverage you select, will cover your home against the breakdown of major systems and even some appliances, like furnaces and water heaters.  In some cases, you can even upgrade the coverage to protect against roof leaks and some plumbing issues. When a covered item breaks down, just remember to call the home warranty company first - for the cost of a service call you can get the item repaired or even replaced, if necessary.  I remember the home warranty company replacing a $900 water heater in my first home; what a godsend!
Talk with your agent - you might even be able to negotiate for the seller to pay for the first year's cost of the warranty.  Just remember to renew it when it expires every year, to keep a cap on your risk of unexpected repair costs for the duration of your tenure as a homeowner.

3.  Get repair bids and estimates, not just inspections.  After you find the home of your dreams (or the home of your budget!) and get into contract, you'll have a contingency or objection period ranging from 7 to 17 days during which you can obtain all the inspections you want.  Most buyers start out with a general property inspection, a pest inspection and a roof inspection, then get more specialized inspections if the property calls from it.  Pest and roof inspectors will generally provide an inspection report AND a repair bid for any work they find needs to be done.  

But the overall home inspection could very well list a dozen needed repairs, upgrades and maintenance items, without providing any information about how much those repairs will cost.  If your inspection report surfaces work you'll need to have done to fix things (or avoid bigger fixes down the road), work with your agent to schedule actual repair contractors to come in and give you bids on the work before your contingency or inspection period expires.  That will position you to negotiate around repair costs with the seller, or to know what you're getting yourself into, cost-wise, if you take the property as-is.

4.  Buy on the 10-year plan.  Warren Buffett once famously advised stock investors to "only buy something that you'd be perfectly happy to hold if the market shut down for 10 years."  The same advice is good for buying a home in today's real estate market.  Take on a mortgage you know you can sustain, buy at a price you can comfortably afford and avoid having to sell because you need to move for some urgent reason, or because the home no longer meets your needs.  

You can take this last step to hedge against losing money on your home by planning your space, career and lifestyle needs out 5, 7, even 10 years in the future - everything from how many bedrooms and garage spaces you'll need to where you'll want to be located, geographically - and selecting a home that will meet those needs for that foreseeable future. As a general rule of thumb, the harder hit the area was in the recession, the longer you should plan to hold it.

Note: This article copied from a blog posting by Tara-Nicholle Nelson, a broker in San Francisco.
To read the whole article in original form, please visit their site.

Friday, July 29, 2011

Good Driver? Take a Snapshot!

Triplett Companies now offers 'Snapshot', a revolutionary driver monitoring box made possible by Progressive Insurance.  What is Snapshot?  The Snapshot box is a 1” x 2” black box mailed to you after the purchase of a Progressive policy.  The box is affixed to your car (under the hood), and hundreds of pieces of data are calculated then sent to Progressive with information about your driving habits.  Such habits being monitored would include: hard breaking, swerving, time of day driven, average speed driven, and acceleration.  After 6 months with this box in your car, you can send it in to Progressive for up to a 30% discount on your next renewal!  Want to learn more about Snapshot?  Contact an agent at Triplett, or visit the snapshot website!

Wednesday, July 27, 2011

Targeting the Mortgage Interest Deduction

It's obviously going to be a Herculean task for Congress to balance the budget and reduce the deficit. It's estimated that the mortgage interest deduction cost the government $100 billion last year which is why it is a target for cuts.

The Mortgage Interest Deduction has been part of Income Tax laws in this country since 1913. The United States of America is one of the few countries in the world that allow such a deduction. Our goverment has always supported homeownership; as is evidenced in the different tax benefits it receives.
  • Mortgage interest deuction up to $1,000,000 in acquisition debt on a principal residence and second home
  • Deduction of interest on Home Equity debt of $100,000 over acquisition debt used for any purpose
  • Capital gain exclusion on up to $500,000 for married couples filing jointly and $250,000 for single homeowners
  • Favorable long-term capital gain rates if gain exceeds exclusion limits
  • Property tax deduction
There is an interesting relationship between a good economy and a healthy housing market. Contrasted to profits from the stock market which tend to be plowed back into other investments, profits from home sales tend to be spent on consumer products that directly benefit the economy.

The National Association of REALTORS supports the MID and reports that one job is created for every two homes sold. It further states that $60,000 is pumped into the economy for each home sold and that homeownership accounts for over $2 trillion of the U.S. gross domestic product.

American homeowers are currently paying 80-90% of all federal income tax collected. Some economists believe that a healthy housing market is a leading indicator for economic recovery and that tampering with a significant homeowner benefit like the mortgage interest deduction would hurt the economy.

Sunday, July 24, 2011

Housing Prices to Rebound

The U.S. housing market is close to a recovery that could begin this quarter, said Housing and Urban Development Secretary Shaun Donovan.  "It's very unlikely that we will see a significant further decline," he said.  "The real questions is when will we start to see sustainable increases.  Some think it will be as early as the end of this summer or this fall."

Check out the Bloomberg Online New Story

Wednesday, July 20, 2011

I Want a Nicer Home, but....

There are homeowners that would like to have a larger/nicer home but are patiently waiting for the market to improve. A frequently heard objection is that they can't sell their home for what it is currently worth.

Buying up in a down market is actually advantageous because while you might get less for the home you're selling, you're also getting the larger home for less. For instance, if you had to sell a $200,000 home for a 10% discount, you might feel that you left $20,000 on the table. However, buying a $300,000 for the same 10% discount would put you $10,000 ahead on the sale and purchase.

The other obvious matter is that when the mortgage rates increase while you're waiting for the market to improve, it dramatically increases your cost of housing with higher payments. The cost of housing is affected by price and mortgage rates.

To accurately evaluate your current options, you need facts and assessment tools that will provide you the information to make an informed decision.  Let us help you make the choices that will affect your life.

Thursday, July 7, 2011

Declare Your Independence

With the 4th of July weekend just behind us, what better way to continue to celebrate independence than insuring your prized investments?

With Triplett, you can insure about anything you hold dear. Talk to one of our independent agents today to experience the Triplett difference and declare your independence!

Tuesday, July 5, 2011

"I Do" Want a Home!

Forget Macy's and Crate & Barrel. Set up your bridal registry at the bank and use the funds for the FHA down payment on a home. This could be perfect for people getting married who already have their household items and really need help getting into a home.

FHA has had this little known program that allows cash gifts since 1996. Sellers, builders, real estate agents or anyone with a financial interest are restricted fom making a gift contribution. It's not difficult to set up and it's available with any FHA lender.
  1. Inform your mortgage professional early of your intention to obtain all or part of your down payment from gifts to the FHA homeowner bridal registry.
  2. Open a savings account at your bank named "bridal registry account"
  3. Friends and family are given account deposit information
Gift registries are commonplace and really benefit both the giver and recipient. Etiquette websites like Emily Post state that alternative registries are acceptable. Couples are now suggesting to friends and family that they want help with their honeymoon, education or furnishing a home.

Interestingly, this program is not limited to people intending to be married. It is available for other situations where gifts are typically received by individuals. Other occasions could include graduation from college or graduate school.

Sunday, July 3, 2011

Who Represents You?

In almost every state in the U.S., buyers have the option of being represented by their real estate agent. This relationship creates responsibilities that require the agent put their client's interests above their own.

The duties a buyer or seller can expect to receive (among others) are honesty, accountability, full disclosure, representation and reasonable skill and care. In a nutshell, the agent who represents you is working in your best interest.

It's a special relationship that doesn't exist with most of the other professionals involved in a real estate transaction. Mortgage and title officers are limited to their duties of honesty, accountability and specific requirements under the Real Estate Settlement and Procedures Act.

This special relationship with your real estate agent makes it advantageous to have them coordinate your efforts with the other professionals in the home buying process. Since most buyers' and sellers' transactions are infrequent, the agent can bring valuable experiences to the transaction.

At Triplett our real estate agents are trained and have special tools to help you make better decisions when you buy or sell and in between. Our goal is to help you improve and maintain the investment in your home so we can earn the right to be your lifelong real estate professional.