Your mortgage payment is probably the largest one in your monthly budget, and you assume it will be the same amount for the next 30 years. That may not always be the case, however, and that depends on a few factors. Be prepared for changes, and understand those changes: 

• If you paid less than a 20% down payment, you are required to have Mortgage Insurance with FHA and USDA loans, while Private Mortgage Insurance is required with other lenders. In some cases,, these can be removed, and your mortgage payment will reflect the change. 
• An Adjustable Rate Mortgage (ARM) has a set interest rate for a certain amount of time, and after that time is up, the interest rate will vary. When the rates change, your payments will, too. Learn more about ARMs from Investopedia. 
• Changes in escrow are almost unavoidable. What is escrow? The Consumer Financial Protection Bureau’s definition: “An escrow account…is set up by your mortgage lender to pay certain property-related expenses.”  When property taxes or insurance premiums increase, your current payments won’t reflect that change, and that results in an escrow shortage. The shorted amount will be added to your loan payment, plus the new amount for adjusted increases. To avoid paying extra every month for the shortage, pay the amount in full as soon as you receive your annual escrow statement. 

• What if you don’t have an escrow account on your mortgage, and you don’t pay your property taxes?  Lenders don’t want to foreclose on a home because of delinquent property taxes. To protect their money, they can add the amount to your current loan payment or open an escrow account for your loan. 
• Homeowners insurance is a requirement when you have a loan on the home. If yours lapses, or you don’t have enough insurance on the house, lenders have the right to purchase a policy, called “forced-place insurance.” They will send you the bill for the premium, which is probably more expensive than your current payment.  

While escrow accounts aren’t always a requirement, it would benefit your budget to request one when you are applying for the mortgage. Keep an eye on your insurance information as well as your property taxes so you won’t be surprised when your monthly payment increases. Having an emergency savings account can help ease any of these burdens.   

Access Teri’s one-stop Orlando FL home search website.

Teri Isner is the team leader of Orlando Avenue Top Team and has been a Realtor for over 24 years. Teri has distinguished herself as a leader in the Orlando FL real estate market. Teri assists buyers looking for Orlando FL real estate for sale and aggressively markets Orlando FL homes for sale.

You deserve professional real estate service! You obtain the best results with Teri Isner plus you benefit from her marketing skills, experience and ability to network with other REALTORS®. Your job gets done pleasantly and efficiently.  You are able to make important decisions easily with fast, accurate information from Teri. The Orlando Avenue Top Team handles the details and follow-up that are important to the success of your transaction.

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Making the decision to renovate any room in your home comes after a lot of thought and planning, but don’t forget that changes in your home can create changes in your homeowner’s insurance.  Whether the renovations lower or increase the payment depends on the job, so we’re going to look at how a remodel can affect your wallet: 

• Additions:  Whenever you add square footage to your home, your policy will need to be upgraded, likely increasing your premium. 
• Converted Space:  Turning your garage into a home theater or creating a master suite from your attic space may not require changes to the policy if the square footage is already covered, but as replacement value has changed, you will want to increase your coverage. 
• Home System Upgrades: Improving electrical and plumbing systems can lower your premiums, as upgrading them can make your home safer from incidents relating to fire and leaky pipes. 

• Pools:  Installing a pool or hot tub in your backyard will add to the replacement value of your home, and you’ll need to increase liability coverage to protect yourself in case of any accidents, 
• Roofing:  A new roof can lower your premium, especially if you upgrade it to the latest standards of protecting your home from natural disasters. 
• Security Systems:  According to Safewise, adding a home security system could lower your homeowners premium by 20%.   
• Solar Panels:  You will want to talk to your insurance agent before installing solar panels to your home.  They may require a separate policy, depending on how they are mounted, which would add to your budget.  
• Upgrades:  Whether you use top-quality building materials for your renovation, upgrade the finishes in your home, or install state-of-the-art appliances in the kitchen, you’ll need to change your policy to reflect the replacement value. 

Making changes to your home improve your quality of life in many ways, but it may come at a cost.  Protecting your investment is worth it in the end, but you want to be prepared for anything that will add to your monthly budget. Schedule a meeting with your insurance agent before beginning any major changes in your home so you won’t be surprised when your payment increases. 

Access Teri’s one-stop Orlando FL home search website.

Teri Isner is the team leader of Orlando Avenue Top Team and has been a Realtor for over 24 years. Teri has distinguished herself as a leader in the Orlando FL real estate market. Teri assists buyers looking for Orlando FL real estate for sale and aggressively markets Orlando FL homes for sale.

You deserve professional real estate service! You obtain the best results with Teri Isner plus you benefit from her marketing skills, experience and ability to network with other REALTORS®. Your job gets done pleasantly and efficiently.  You are able to make important decisions easily with fast, accurate information from Teri. The Orlando Avenue Top Team handles the details and follow-up that are important to the success of your transaction.

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The benefit of insurance is to transfer the risk of loss to a company in exchange for a premium. The deductible is an amount the insured pays out of pocket before the insurance starts covering the cost of the loss. The challenge is to balance the risk an insured can accept with the premium being charged.

To manage insurance premiums, policy holders often consider adjusting their deductibles. Lower deductibles result in less money out of pocket if a loss occurs in return for higher premiums. Higher deductibles will lower premiums but require that the insured bear a larger amount of the first part of the loss.

Insurance companies offer deductibles as a specific dollar amount or as a percentage of the total amount of insurance policy. The amount is usually shown on the declaration page of homeowner and auto policies.

A small fire in a $300,000 home that resulted in $5,000 of damage might not be covered because it is less than the 2% deductible which would be $6,000. If the homeowner can afford the cost of repairs in exchange for lower premiums, it might be worth it. On the other hand, if that loss would be difficult for the homeowner, a change in the deductible for higher premiums could be considered.

Raising deductibles can save money in the present when paying the premium but could cause problems later if a claim occurs. Homeowners should review deductibles with their property insurance agent to be familiar with the amounts and make any changes that would be appropriate.

Access Teri’s one-stop Orlando FL home search website.

Teri Isner is the team leader of Orlando Avenue Top Team and has been a Realtor for over 24 years. Teri has distinguished herself as a leader in the Orlando FL real estate market. Teri assists buyers looking for Orlando FL real estate for sale and aggressively markets Orlando FL homes for sale.

You deserve professional real estate service! You obtain the best results with Teri Isner plus you benefit from her marketing skills, experience and ability to network with other REALTORS®. Your job gets done pleasantly and efficiently.  You are able to make important decisions easily with fast, accurate information from Teri. The Orlando Avenue Top Team handles the details and follow-up that are important to the success of your transaction.

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As we watch with horror the impact natural disasters have on those affected, it is only natural that we ask ourselves,” Would I be able to sustain such losses? Would my homeowners insurance policy cover the costs of rebuilding?

The National Association of Insurance Commissioners (NAIC)) recommends that you use your annual renewal notice or any improvements to your home as a reminder to touch base with your agent or insurer to recheck how much insurance you really need. Do you have sufficient coverage for rebuilding and replacement? Amy Bach, executive director of United Policyholders, a consumer advocacy group, urges homeowners not to blindly trust that their home insurer has all the bases covered.

With fluctuations in the real estate market, coverage equal to the current replacement cost (excluding land), is advisable. The first step in getting adequate coverage is to establish your policy’s dwelling limit. Your target number is the full-replacement cost of your home and its possessions. The dwelling limit bears no relation to your property’s market value, its appraised value, or its assessed tax value. And don’t mistake the cost of new construction for the cost to rebuild, which is more expensive because of factors such as debris removal and higher demand for materials and labor after a catastrophe,

(You can get a pretty good idea of what it would cost to rebuild your home by using an online calculator, available at sites such as HMFacts.com ($7) and AccuCoverage.com ($8).

It’s a good idea to purchase guaranteed replacement coverage, meaning the insurer will pay whatever it costs to rebuild your home with materials of like kind and quality, without deducting for wear and tear. Avoid actual cash value coverage, which pays only the depreciated value of your home.

Check also on your need for flood insurance, even if you don’t live near a body of water, since policies vary in their coverage of many types of water damage.

And lastly, it goes without saying that you need to update the inventory of your possessions at least annually since it is not only a record of the contents of your house and their value, but also a good indicator of whether you have enough coverage.

Information courtesy of Orlando Real Estate Expert Teri Isner.

Access Teri’s one-stop Orlando FL home search website.

Teri Isner is the team leader of Orlando Avenue Top Team and has been a Realtor for over 24 years. Teri has distinguished herself as a leader in the Orlando FL real estate market. Teri assists buyers looking for Orlando FL real estate for sale and aggressively markets Orlando FL homes for sale.

You deserve professional real estate service! You obtain the best results with Teri Isner plus you benefit from her marketing skills, experience and ability to network with other REALTORS®. Your job gets done pleasantly and efficiently. You are able to make important decisions easily with fast, accurate information from Teri. The Orlando Avenue Top Team handles the details and follow-up that are important to the success of your transaction.

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