What is a Home Warranty?

Homeownership can come with many costs in addition to your monthly mortgage payment and utilities. Maintenance is one of them. If you don’t want to have to worry about footing the bill for a big, unexpected repair, one of the things you can do is get a home warranty.

If you’ve never heard of a home warranty before, keep reading. We’ll explain to you what this warranty is, how it works, and how you may be able to save money on some of the biggest costs of owning a home.

Armed with this knowledge, you should have a better idea of whether or not getting a home warranty might be something to consider in the future.

What is a home warranty?

Put simply, a home warranty is an annual service contract. It protects your home’s systems and appliances if they break down. Whether you just need a repair or a full replacement, a warranty should cover the cost of the parts, meaning that your bill will be significantly smaller than it would be otherwise.

How does a home warranty work?

If you have a home warranty, the first thing that you should do when something breaks is called the company. Typically, one of their representatives will be able to tell you whether or not the repair is covered under your specific warranty.

If the repair is covered, the warranty company will help you schedule a service call with a pre-screened professional. The professional will then come out to your house and make the repair or replacement as needed. In return, all you will have to do is pay for the service call. The home warranty will cover the cost of any replacement parts.

What types of repairs are usually covered by a home warranty?

It’s important to note that every warranty company is different, so their coverage will be different as well. However, that said, most home warranties will cover the home’s systems and all your major appliances, including:

  • Appliances
  • Refrigerator
  • Dishwasher
  • Stove (Gas or electric)
  • Microwave
  • Clothes’ washer
  • Clothes’ dryer
  • Garage door opener
  • Trash compactor
  • Systems
  • The heating system and ductwork
  • Air conditioning system and ductwork
  • Plumbing
  • Water heater
  • Garbage disposal
  • Smoke detectors
  • Central vacuum
  • Ceiling fans
  • Doorbell

In addition, many home warranties also offer the option for you to add on additional services for things like septic pumps, well pumps, or pool equipment. Meanwhile, others give you the option to extend coverage to a separate guest house or in-law suite.

If you have specific questions about what the warranty covers, your best bet is to call a home warranty company and to ask to speak to a representative. They will be able to tell you about the specific coverage limits of their policies and any optional, add-on services that they offer.

Is a home warranty right for me?

Ultimately, as the homeowner, you’re the only one who can decide whether or not a home warranty is right for you. However, if your home systems and appliances are older, it may be worth investigating. While this is an extra annual cost, it can save you from having to worry about an unexpected maintenance expense cropping up at the worst possible time.

Additionally, if you’re thinking of selling your home shortly, you may want to think about getting one of these for the future buyer. Often, advertising one can be a bonus for your listing in a competitive market.

Increase Purchase Power

Purchase Power

With a limited inventory of affordably priced homes and a high demand, searching for a house can feel exhausting. Although the competition and dreaded multiple offer situation may make you want to put off purchasing a home until the market slows, 2020 is actually a great time to buy. Here’s why.

In the Spring, mortgage rates hit historic lows. Homebuyers this time last year were locking in rates around 4.5%, and currently, rates remain steady in the 3% range. Considering the vast majority of buyers finance their homes, mortgage rates directly impact most people’s purchasing power! But how exactly do interest rates affect how much home you can afford?

The lower the rate, the more purchasing power you have which means you can get more house for the same monthly payment. With a lower interest rate, more of your money goes directly to the principle of the loan—maximizing how much home you can afford and minimizing the monthly payment. With each 0.125% shift in mortgage rates, your buying power changes, and a 1% difference could add $30,000 to your budget. Who doesn’t want more house for the same amount of money?! Even if you haven’t saved the full down payment you want, a low-interest rate will likely translate into ample savings on your monthly payment.

Rates are predicted to stay around 3% through 2020, so if you are on the fence about buying, it may be in your favor to start looking now. These historically low rates will allow you to stretch your dollars and give you more flexibility to find a home that is perfect for you.

Contact us today!

Unmarried Home Purchase: What You Need To Know

It’s common for unmarried couples to want to buy a home. Married or not, it is possible. Buying a home is one of the most significant financial decisions of your life, so it’s important to understand the details of buying a house as a couple.

Here are four things you should plan for when buying a home as an unmarried couple:

Thoroughly Discuss Your Finances

It’s very beneficial for couples to discuss each other’s financial situations in detail. Before meeting with a lender or realtor, it’s imperative that you review each other’s credit score, income, debts, and financial history. Most differences between your finances can be accommodated, so it’s important to know the details of each other’s finances in case any surprises arise. This step will prevent any conflict during or after the mortgage process.

Determine Your Costs and How to Split Them

It’s essential to have a system in place to split bills and other expenses. This is even more critical when buying a home. First, figure out how to divide the down payment and closing costs when purchasing the home. Then, discuss and decide how to handle the monthly mortgage payments, utilities, and other costs associated with owning a home (emergency repairs, maintenance, taxes, etc.).

You may want to work this out together with a real estate attorney and get the details in writing to keep things on record. If you don’t already have a joint bank account, it may be a good idea to at least create one for funding the home while keeping your other funds separate.

Understand Your Ownership Options

You may not have known that there are options for the purchase of your home. Deciding on which ownership option suits you may be one of the most important decisions in the process. Your home’s title can be configured in a few different ways, depending on which state you live in:

Joint Tenancy: You both equally own the property. Common between husbands and wives, joint tenancy allows one of you to inherit the property if something should happen to the other.

Tenancy in Common: You both own a specific percentage of the property. For example, you may own 40% of the property while your significant other owns the other 60%. If something happens to one of you, the ownership will transfer to whoever is denoted in a living will or trust. If there is no will or trust, ownership goes to the next of kin and not your significant other.

Sole Ownership: Some couples may find that it’s better just one of you to have full ownership of the home. If you have better credit than your significant other or are in a better place financially, this may work for you.

Create a Backup Plan

Sometimes things don’t work out as planned and, legally speaking, there are no protections in place for unmarried couples who co-own a home. We recommend creating a partnership agreement. Similar to a prenuptial agreement this will detail what happens to the home if you two split up. Written contracts are the best way to plan so we recommend you take any chance you get to draw up your agreements in writing.

Do you have questions or would you like to sit down for a complimentary no-obligation consultation? We are your Home Loan Experts, at your services. Give us a call 520-495-0222.

How To Win A Multiple Offer Situation

How To Win A Multiple Offer Situation

The real estate market is hot right now, and the competition for homes is rising with little inventory to satisfy the demand. Homes are being sold with multiple offers on the table within days, and even hours, after listing. This may be ideal for sellers, but for buyers, this could mean trouble if they don’t have a skillful real estate and lending team representing them to snatch the perfect home.

Get Pre-Approved!

Make sure your borrower is in the strongest financial position possible; in today’s market, you’re going to need every card on the table. This means your client’s financing decision needs to be strategic. You need a lender who will match your client with financing that puts them in the best bargaining position possible. Get a pre-approval in hand so your client can shop with confidence.

Understand the Seller.

Find out what the seller’s experience has been like so far. If they have placed the house on the market several times only to have the deal fall through, your client can use this to their advantage by differentiating themselves from previous and current prospective buyers.

Stand Out with a Powerful Introduction Letter.

This will humanize your client and their situation to the seller. Let’s say your client can’t beat the best offer, but they can at least match it. That is when a humanizing touch can be enough to sway things in your favor. Help your clients craft a letter that tells their story; you want the seller to feel like your clients deserve the house.

Be Flexible.

Counsel your client on flexibility whenever possible. Be ready to yield to the seller’s desires, from the close date, to concessions, to who will pay for minor repairs. The more ideal and uncomplicated you make the offer, the easier it is to choose you over the next guy.

Have a Lender Who Won’t Let You Down.

Let’s say you do manage to get the offer accepted. Congratulations! But now is the most crucial part; delivering on those promises. If your lender fails to meet deadlines, doesn’t communicate proactively, or worse, didn’t really pre-qualify the client, your reputation could take a serious blow. Help your client choose a lender who makes you look good. Allow us to be that trusted partner!

If you have questions about how to get your client pre-approved with a lender you can trust, please feel free to reach out to The Polder Group at Summit Funding at your earliest convenience. We would love to work with you!