Rising Insurance Premiums

Insurance premiums are raising, in part due to the manner in which insurance companies now assess the risk of insuring a particular client and his/her property.

 

That is, new insurance models assess “occurrences of nature” risk over a very short-term horizon, so that two natural disasters in a short time period will significantly increase today’s home-owner’s insurance premiums.

 

Additionally, insurance companies share information with competitors through a Comprehensive Loss Underwriting Exchange (CLUE) database.

 

You may go online and order a free CLUE report at https://personalreports.lexisnexis.com/.


Prudence dictates that you might complete such a request at least one time per year to ensure there are no errors in the report.

 

Contact Mike, Andrea, or Mandee at Triplett Companies to further ensure you are receiving the best price for your insurance needs.

Single-Family Homes

Single-family homes used for rental property have distinct advantages over other types of investments.
An investor can borrow 75-80% at fixed interest rates on appreciating assets with definite tax advantages and reasonable control. The financing alone is attractive compared to some investments that require 50% cash and have floating rates at prime plus for one or two years.
Home prices have adjusted 30-40% around the country, mortgage rates are incredibly low and rents have risen in the past two years due to more demand and shorter supply. Indicators like these point to a strong and sustained rental market.
Consider you bought a $125,000 home for cash that would rent for $1,250 per month. With $15,000 income and allowing for property taxes, insurance and maintenance, it is still reasonable to expect $10,000 net income. You'd have an 8% return on investment without considering tax savings or future appreciation compared with 5-year CDs paying less than 1.5% and a 10-year Treasury yield at 1.65%.
The reasonable control has a lot of appeal to many investors who find the volatility of the stock market unacceptable and don't want the risk associated with some of the alternative investments. Please contact me if you'd like to know more about available opportunities.

Keep Your Home Safe

There are times when you need to change the locks on your home to protect your family and possessions. It should always be considered when you move into a new home; when keys are lost, stolen or unreturned; or a cleaning or other service provider hasn't returned the key.
Replacing the lockset would give you a totally new mechanism that should work better and if you go back with the same manufacturer, you'll probably avoid any carpentry. You can order the locks online and have them work with the same key at no extra charge.
Another alternative is to have a locksmith rekey them. The locksmith can easily make all of the locks work with the same key. Compare the cost and decide which would be a better expenditure.
While you're considering your security, a key safe might be a very convenient addition. Most makers say that it is much easier to break into a home than a key safe. The cost is reasonable and you can attach it to your exterior wall. Generally, they're combination locks that would allow you access if you or another family member forgot their key. It's also convenient to give a house keeper the combination and can be easily changed if necessary.

Discounts on Insurance

It’s Christmas time and maybe you haven’t received your holiday bonus, or perhaps you spent a little too much on gifts, and now you dread your insurance bill arriving in the mail.

 

Never fear, discounts are here!

 

Multi policy:

Most insurance companies offer discounts for multiple insurance policies with their company. Consider combining your vehicle, home, and umbrella policy with one carrier and see how much you can save!

 

Good Student:

If you or your child is under 25, in school, and has a GPA of 3.0 or below, you qualify for the Good Student Discount! Simply send us a copy of your most recent transcript showing your GPA.

 

Limited Driving:

Do you only drive your vehicle to church on Sundays? Does your vehicle sit in the garage most of the time? Some carriers provide limited driving discounts.

Loyalty:

Did you know that insurance companies actually give you with a discount for being loyal to them? Even if you do decide to switch insurance companies, you can receive a discount for the number of years you were with your old insurance company.

 

Be sure to contact Mike, Andrea, or Mandee at the Triplett Companies and ask them to compare the cost savings you could enjoy by utilizing some or all of these discounts!

 

15 Year Loan Over a 30 Year Loan

Whether you're refinancing your current home or buying a new one, something worth considering is a 15 year loan rather than a 30 year term. The payments will be a little higher but you'll get a lower interest rate and you'll build equity much faster.

Let's look at an example of a $200,000 mortgage with the choice of a 30 year term with a 3.75% rate compared to a 15 year term with a 2.875% rate. The payments would be $442.94 higher on the shorter term but the equity would be considerably higher even after you adjust for the higher payments.

Another benefit is that the shorter term loan creates a forced savings situation where the savings on a longer term loan might end up being spent rather than being saved and invested. Contact me if you'd like a recommendation of a trusted lender.

Your Dream of Owning a Home is Possible

The American Dream of owning a home is still alive. People still want a place of their own; where they can raise their family; share with their friends; feel safe and secure. Homeownership creates emotional and financial benefits.
The government supports that dream by allowing deductions for mortgage and home equity interest as well as property taxes. The capital gains exclusion on profits from a home is incredibly generous and a low long-term capital gains tax rate applies to excess profits.
It's reported that some of the social benefits of owning a home include higher voter participation, better physical health, higher student test scores, lower teen delinquency, neighborhood stability and pride in the community.
If for no other reason, the decision to buy a home should be considered when it costs much less to own a home than it does to rent. With the unusually low available mortgage rates, the payment is generally less than comparable rent. However, the decision becomes more obvious when the other benefits are considered like amortization, appreciation and tax savings.
It's not uncommon for the net cost of housing to be half of the actual mortgage payment. In most cases, it is significantly more to rent than to own which could amount to more than the down payment in the first year alone. Calculate your cost of Renting vs. Owning.

Christmas Safety

Here are some tips from the Insurance Institute for Business and Home Safety on how to keep your home safe and looking beautiful during the holiday season!

Christmas Trees

• Live trees should be fresh. Buy a tree that is green and the needles are hard to pull from the branches. Fresh trees have trunk butts that are sticky with resin.
• Place trees away from fireplaces, radiators, other heating sources, heavy foot traffic, and doorways.
• Keep live trees watered to help prevent them from drying out, which increases the susceptibility to fires.
• Artificial trees should be labeled by the manufacturer as fire-resistant.

Outdoor Lights

• Use only lights with fused plugs, that have been certified for use outdoors, and that have been tested for safety by a recognized testing laboratory.
• Check for broken or cracked sockets, frayed or bare wires, or loose connections, and throw out damaged sets.
• Always replace burned-out bulbs promptly with the same wattage bulbs.
• Use no more than three standard-size sets of lights per single extension cord. Make sure the extension cord is rated for the intended use.
• Stay away from power or feeder lines leading from utility poles into older homes.
• Fasten outdoor lights securely to trees, house walls, or other firm supports to protect the lights from wind damage. Use only insulated staples to hold strings in place, not nails or tacks. Or, run strings of lights through hooks.
• Turn off all holiday lights when you go to bed or leave the house.
• Use caution when removing outdoor holiday lights. Never pull or tug on lights – they could unravel and inadvertently wrap around power lines.
• Outdoor electric lights and decorations should be plugged into circuits protected by ground fault circuit interrupters (GFCIs).

 

FDR's New Deal

A 30 year fixed-rate mortgage hasn't always been the standard. As part of FDR's New Deal in 1934, the Federal Housing Administration was created to help Americans purchase homes with affordable terms.
Prior to then, many loans had an amount due at the end of the term called a balloon. Most mortgages had adjustable interest rates even though some might be fixed for a short time. While banks would loan money on a home, they retained the right to call the note due at any time which could exert considerable stress on borrowers.
FHA, during this time, introduced mortgages that offered a fixed rate of interest to the borrower for a 30 year term. This fully amortized loan provided borrowers a financial vehicle that would help them achieve the American Dream while minimizing the risk of having a loan called without the resources to pay it off. It brought long-term stability to the housing market and helped stimulate the economic recovery at a very difficult time in our nation's history.
Roughly, a third of the mortgages created in 2011 were less than 30 year terms. Many homeowners, similar to those after the Great Depression, would like to get their home paid for as soon as possible. Shorter term mortgages typically have a lower interest rate but higher payments due to fewer years to amortize the mortgage.

Primary Factors For Investment

Rental properties have four primary factors that contribute to a return on investment. Based on market conditions and investor strategies, the individual motivating factor can change for property owners.
There was a time when the benefit of tax savings to offset income from other sources was considered important to some investors. However, in today's environment, they are more likely valued as incidental benefits.
Some investors expect appreciation to deliver the satisfactory results which can be reasonable over time if a reliable appreciation rate is used. Savvy investors today are using conservative estimates for long-term holding periods.
Leverage occurs when borrowed funds are used to control a larger asset. Positive leverage can actually increase the yield on an investment.
The fourth component that contributes to a property's yield is the cash flow. When the rents are greater than the expenses of operating the property and servicing the debt, there is a positive cash flow. A property with a good cash flow doesn't have to go up in value to justify the investment.
The combination of lower prices, incredibly low mortgage rates and rising rents are attracting investors to rental properties that include single-family homes in predominantly owner-occupied neighborhoods.
Even if you were to ignore the benefits of tax savings, potential appreciation and leverage, the attractive cash flows make rental property a very smart investment alternative. If you're curious, contact me for more information.

Helpful Hints for Winter Driving

Winter can be a fun time with the holidays, no school, hot chocolate, and snowball fights, but it can also be a dangerous time on the road.

Deer claims are especially high around October to December due to the fact that it is the deer migration and mating season, around 1.23 million vehicle-deer collisions occurred in the U.S. between July 1, 2011 and June 30, 2012 (Iowa Agent Newsletter).

 But it’s not only deer that we need to watch out for; it’s snow, ice, and cold weather.

The Washington State Department of Transportation website has several tips on how to keep you safe this winter:

• Drive for conditions -- slower speeds, slower acceleration
• Use your headlights
• Don't use cruise control
• Remember that four-wheel and all-wheel vehicles don't stop or steer better on ice; be careful!
• Leave extra room between your vehicle and the vehicle in front of you. Remember, the larger the vehicle, the longer the stopping distance
• Slow down when approaching intersections, off ramps, bridges or shady spots
• If you find yourself behind a snowplow, stay behind it until it's safe to pass. Remember a snowplow driver has a limited field of vision. Stay back (15 car lengths) until you're sure it's safe to pass or until the plow pulls off the road
• On multi-lane roadways, snow plows often need to clear the center, throwing snow, ice and slush into nearby lanes. If approaching an oncoming snow plow, slow down and give the plow a little extra room
• Check your tires and tire pressure during cold weather (tire shops and mechanics are busiest just before and during winter storms)
• Get a vehicle winter maintenance check-up. Check your battery, belts, hoses, radiator, lights, brakes, heater/defroster and wipers
• Keep your fuel tank full; don't let it fall below half a tank on winter trips

During the winter it pays to have a survival kit in your car in case the unthinkable happens. One of our insurance companies, State Auto, has a list of what to keep in your car during the winter months:

1.      Full tank of gas

2.      First aid kit

3.      Cell phone charger

4.      Flashlight

5.      Water/snacks

6.      Ice scraper/snowbrush

7.      Boots/gloves/warm clothes

8.      Music/games

9.      Jumper cables

10.  Flares

11.  Tire chains

Service Provider

While the Internet is a great resource to locate information about food, travel and a number of other things, it isn't necessarily the best place to find a local service provider.
Sure, you can run the search, get quick results and may even see some fairly impressive websites. The problem is that sometimes, those sites are run by companies that sell the leads to providers who may not be as experienced as you're expecting.
Instead of taking a chance on a total stranger, a personal recommendation could yield you more satisfactory results. Most real estate transactions require some work to be done to the house either in preparation prior to the sale or to meet requirements from the buyer or inspector after the sale is made.
Looking for a service provider on the Internet is easy. Contact me for a recommendation is easier still and you can trust that they'll be reputable and reasonable. I want to be your personal source of real estate information.

Flood Insurance on Your Home

A number of things can cause water damage to a home and it's important to know whether they're covered by your insurance policy. Some water damage may be covered and other may not be. Generally, you need an incident to invoke coverage rather than something gradual due to lack of maintenance.
However, some incidents are specifically exempt from homeowner policies such as floods. A flood can be described as rising water due to overflow of inland or tidal waters or unusual and rapid accumulation or runoff of surface water from any source.
Homes in designated high-risk flood areas with mortgages from federally regulated or insured lenders are required to have flood insurance.
Even if you don't live in a dedicated flood zone, you could be affected by flood damage. Review your policy about water damage and call your insurance agent to get a better understanding. Ask if you need to purchase additional coverage or separate flood insurance along with other questions.
Flood insurance can be purchased for the building and the contents. The average flood insurance policy costs about $600 per year. For more information, see the National Flood Insurance Program.

The Value of Your Home

Knowing the current value of your home is important when you're considering a move, refinancing or getting a home equity loan. Prices are determined by recent sales and the supply and demand of current inventory.
The process of selecting comparable properties involves matching similar features like bedrooms, baths, square footage and updates. In addition to price, there are other factors that affect the value and ultimately, the sale of a home.
Location plays a significant role because by the unique combination of improvements and land. Beneficial considerations would be convenience to schools, shopping, transportation and proximity to freeways. Undesirable concerns could include being in the vicinity of busy streets, high-tension lines, commercial property and other things.
To receive a computerized estimate on the value of your home that includes prices of comparable homes that have sold recently and homes currently for sale, click here.
Value is not totally objective and does require a certain amount of subjective considerations. If you have questions after you receive your report by email, contact us and we'll be happy to talk to you about your concerns.