The Facts on Down Payments, Closing Costs and Mortgage Insurance
How much do you need to have for a mortgage down payment? How do you estimate closing costs? And should you buy mortgage insurance? Vice President of Dollar Bank Residential Lending, Mike Henry, shares the facts about these important questions.
Hi, this is Robert Mangino. I’m with Mike Henry, Vice President of Dollar Bank Residential Lending. And we’re here to talk about down payments and closing costs.
Mike, how much of a down payment is required to purchase a home?
Well, I think it’s important to know that you’re hearing a lot in the media that it takes 20% down to buy a home and that it’s more difficult. That’s really not true. Conventional financing still requires a minimum of 5% down. FHA is at 3.5% down. And when you’re comparing conventional versus FHA, it would depend on where the source of funds was coming from– whether it was your own savings or whether you were getting a gift from a parent or relative–that would dictate what loan you would look at.
Can you explain mortgage insurance for us?
Yeah, mortgage insurance– people often refer to it as PMI– which is Private Mortgage Insurance. And what mortgage insurance does is insures the loan against default and it’s typically paid in a monthly premium with your mortgage. There’s different options available for it and the more you put down, the less you pay in mortgage insurance premium. But if you put 20% down, you would pay no mortgage insurance.
All right, talk to us about what you can expect to pay in closing costs.
Well, typically– and it depends on the loan amount and the purchase price because a lot of costs are a percentage of the purchase price or the loan amount–but the range is typically 3% to 6% will be your total cost. And it’s important to remember that when you’re looking at, well, “I have a 5% downpayment.” If you’re buying a 0,000 home, you have ,000 as a downpayment, but you could also have another four or five thousand dollars in total closing costs with taxes and lender fees as a total.
Thank you, Mike. For more information, contact a Dollar Bank mortgage expert at 1-800-344-LOAN or visit dollarbank.com.
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Protect Your Income With Disability Insurance
Disability insurance is an oft-overlooked, but nonetheless critical, component of a person’s insurance portfolio. Automobile and home insurance policies protect those two necessities, and life insurance pays a cash amount to a beneficiary in case of death, but what about a person’s income while he or she is still living? An illness or injury – whether on or off the job – can diminish or even eliminate a person’s ability to earn a salary. In such a case, disability insurance can pay for an individual or a family’s expenses.
A disability insurance policy provides a set amount of income to a person who has suffered a serious illness or injury which prevents him or her from performing the duties of a job. Once the illness or injury occurs, there is typically a short waiting period – typically ten days to three months – before the disability insurance policy takes effect. During this time, a person submits a claim to the insurance company.
Just as other insurance policies vary in types of coverage and payout amounts, so too does disability insurance. One can purchase a policy to cover all or just a portion of a person’s income. In addition, the policy may be for short-term coverage or long-term coverage, which means that it will pay a benefit for as little as a few weeks or for a lifetime. The cost of disability insurance policies varies based on the type of coverage and the payout amount.
Many employers offer disability insurance as part of a suite of other benefits, like health insurance or paid vacation time. The premium for this coverage may be paid by the employer, or it may simply be available for the employee to purchase. Sometimes an employer will offer a very basic policy with minimal benefits, in which case it is in the employee’s best interest to find out what the coverage will be and whether or not the policy can be upgraded.
Many professionals who have their own practice cannot rely on an employer for this type of coverage. Many insurance carriers have options available for these individuals to purchase their own coverage. For example, you can find companies offering disability insurance for physicians.
A state’s regulations may require an employer to provide workers’ compensation insurance. This coverage helps an employee in case of injury, but only if that injury is sustained while on the job. An illness or off-the-job injury is likely not covered. In addition, it typically only covers a percentage of an employee’s income and may not be enough to pay a person’s bills.
It is always a good idea for a person to periodically evaluate his or her insurance coverage in the case of a catastrophic event. A simple fall off a ladder or trip to the doctor might result in an injury or illness which can prevent a person from earning a living, in which case disability insurance can help sustain a person’s way of life.
What is No Medical Exam Life Insurance?
For some people getting life insurance can be a difficult and frustrating experience. There are many reasons people may choose a no medical life insurance policy. The following information describes what these policies are, what they include, and when they’re the best option for a consumer.
Benefits of No Exam Life Insurance
Disadvantages of No Exam Life Insurance
What You Need To Know About Medigap Insurance
Medigap insurance is one of the most popular types of medical insurance for people who are of retirement age. The policies that are offered in the private insurance market typically cover costs that Medicare does not cover or will only partially cover.
And yet, many people who reach retirement age are not always aware of the benefits of Medigap insurance before they actually go onto Medicare fully.
One of the great things about Medigap insurance for those who recently qualified for Medicare is that there is a window of about 6 months within which you can qualify for Medigap insurance without taking any physical exams or basing the coverage on your past medical history. That window is there so that there are no delays for people who want to get complete coverage from the moment that they start Medicare. The benefit of taking advantage of this is that no matter your current state of health, you can not be turned down or issued a higher premium by the insurance company. A long-time smoker, for example, could qualify for Medicare supplement Plan F, the most popular of the Medicare supplements, and would pay the same rate as someone who never smoked in their life.
So what type of coverage does Medigap specifically provide you with? To begin with, you should be certain that the policy that you are buying is actually Medigap. Many people call coverage different things, but a Medigap policy will be known on the policy itself as Medicare Supplement Insurance. After you are certain that the policy you are negotiating to purchase is a Medigap policy, you will be provided with a series of options as to the coverages. None of the coverages includes prescription medicine, but most types of procedures that are partially covered by Medicare are included in at least one of the options.
Selecting the option that is right for you depends upon you and the types of medical procedures that you want to be covered for. It is helpful that all policy types are regulated by the federal government so that there is no confusion when it comes to working with one insurance company or another. They will all provide you with standardized coverage options that are very similar in scope.
You can also select different options for yourself and your spouse depending upon your needs, as each policy is personalized for the individual. And although you can rely on keeping the same policy in force for decades after you have signed up, you can always arrange to change to a different set of options later if you decide that you would prefer a different one.
What Is Medicare Advantage?
Medicare is health insurance that is designed for individuals who are 65 years of age or older. It is also for individuals who are under the age of 65 that have certain disabilities or end stage renal disease. Medicare is government run and is designed to help with medical coverage and costs.
Medicare Advantage plans are a type of Medicare health insurance program, also called Medicare Part C, that partners with a private company to provide an eligible person with Medicare benefits. Medicare Advantage have different insurance companies that include HMO’s, PPO’s, Special Needs Plans, and Private Plans that charge Fees Per Service. These companies are approved by Medicare. Most of these Medicare Advantage plans cover health costs, including additional services like vision, hearing, dental, wellness and prescription drug costs.
For a person to be eligible for Medicare Advantage, they need to be 65 years old and have proof that they are able to receive Social Security. A person needs to be a citizen or permanent resident of the United States and will need to show proof of residency. If a person is not a citizen of the United States, but lives in the United States legally, the person applying for Medicare Advantage, must live in the area for at least five years. The applicant must live in an area that provides Medicare Advantage. A person must have either worked and paid taxes into the Federal Insurance Contributions Act for at least ten years or have a spouse or parent that did. Basically, it means that taxes were withheld and paid into Social Security and Medicare taxes.
A person can choose to enroll in a Medicare Advantage and Medicare Supplemental Insurance. With a Medical Advantage plan, Medicare Parts A and B will be included. Hospital care isn’t covered, but will be covered by the Original Medicare Plan. Each plan has different costs and rules specific to each company. With a Medicare Supplemental Insurance plan, a person needs to have both Medicare Part A and Part B. It’s designed to cover the gaps that Medicare Part A and B do not cover. The government does not provide full coverage for anything that may happen during a person’s retirement, so extra coverage is often required. Both plans are designed to help cut a person’s out of pocket costs. With a Medicare Supplemental Plan, the plan cannot be cancelled like a Medicare Advantage Plan could be. Each plan needs to be renewed and is renewable as long as premiums are paid on time.
Can A Diabetic Qualify For Life Insurance?
I get asked this question a lot in my private practice.
Receiving a diagnosis of Diabetes Type II is hard. Your entire lifestyle has to change. All of a sudden, you have to face extreme diet and exercise changes, and must watch your blood sugar levels constantly. This alone can be devastating to you and your family. The Centers for Disease Control and Prevention cites that a number as large as 23.6 million U.S. citizens have this devastating disease, and another 6 million people may not even know they have it. But that doesn’t mean that all of these people live without some type of affordable life insurance. It just means that like them, you need to shop around to find the right insurance policy. Even what are considered some of the best life insurance companies out there offer options for diabetics, so do not feel like you need to limit yourself to some fly-by-night second rate insurance carrier. The following tips can help you find the best insurance for your needs.
1. Get Your Diabetes Under Control – Insurance companies offer policies based on the risk factor they believe a person to be. If you adequately control your Diabetes, you become less of a risk and more insurance companies are willing to offer you coverage.
2. Look for Clinical Underwriting – Some life insurance carriers offer this option, which looks at your overall health condition.
3. Shop on-line – As usual, the best place to look for affordable life insurance is on-line. The lower cost of advertising and operational expenses means insurance carriers can offer better premiums here. But the Internet also offers you a shopping advantage, as you can compare prices on-line and don’t have to rush from place to place or fill out hundreds of applications, only to be turned down because of your Diabetes.
4. Never Accept the Status Quo – Just because you are turned down by one company doesn’t mean you should give up. There are lots of insurance companies out there and they are all vying for clients. So where one rejects you another will accept you.
5. Pay Attention to Every Detail – Paying attention to everything your doctor tells you to do, leading a proactive lifestyle, and comparing every detail of any insurance policy offered you is paramount to your getting affordable life insurance coverage.
When you shop around, compare insurance prices and do everything possible to control your Diabetes, you can usually find this insurance at a price you can afford. Remember, most laws that regulate life insurance, are those imposed by state legislation. So, life insurance options you get in one state doesn’t necessarily reflect what you are offered in another.
What is Final Expense Insurance?
Who Qualifies for Final Expense Insurance?
Any person can purchase a final expense insurance policy. However, usually a person who does not have a regular life insurance policy and is near death will buy this type of coverage. Often, a final expense policy can be underwritten without the need for a medical exam. Policies that do not require an examination are usually sold at higher rates. Nevertheless, due to the lower value, the cost is still less than life insurance.
How Much Final Expense Coverage Should a Person Buy?
The amount of final expense coverage is a discussion for the insured and his or her loved ones. Total costs are based on the type of funeral the insured wants to have. Consulting with a funeral home can offer some insight into how much final arrangements may cost.
Generally, funeral costs can be as little as $1,000 and exceed $10,000. A funeral director can provide a price range based on different factors including the casket, flowers, funeral services, the burial plot and headstones. Other costs to consider may include paying for funeral procession escorts.
The Importance of Having a Final Expense Insurance Policy
Not many people enjoy thinking about what should happen after their death. However, forgetting about loved ones left behind can make an already sad occasion a stressful situation. Family members and/or close friends must take care of final arrangements; they will need finances to cover those expenses.
Anyone who does not have a standard life insurance policy should consider a final expense policy as an alternative. Comparing available options such as policy value and medical examinations is a good way to get started.
Rehoboth Beach Real Estate
Rehoboth Beach may be best known for it’s long boardwalk, beautiful beaches and classic Victorian downtown area. The town developed during the Victorian era as a seaside resort and it’s popularity has continued to today. Little bungalows, beach side cottages and Victorian homes are just some of the styles that one sees while driving around the area. The relaxed lifestyle and easy access to all desired amenities makes this region popular for both summer time residents as well as the ever increasing year round population.
There has been an increase in recent years of real estate buyers looking for year round living in Rehoboth. The Rehoboth Beach real estate market offers a variety of housing to meet just about any need. Condo developments in several areas as well as planned housing communities that are in close proximity to amenities and the beach area offer additional selections to meet buyer interests. Older communities are seeing a turn over of properties for those interested in well established neighborhoods or in a “fixer upper” that may be outdated for today’s buyer. The ever popular beach front areas and downtown Rehoboth Beach areas provide some classic Easter shore homes right in the center of the action.
The recent downturn in the real estate market nationwide has lead to decreases in property values and sale prices in Rehoboth Beach as well. However, this opens up opportunities for those looking to buy at this time and savvy buyers are taking advantage of this.
If you are looking for a beach front community to move to permanently or simply for summertime living, Rehoboth Beach, Delaware is sure to have something to please everyone in your family.