Category Archives: Business Insurance

Home Buying Process Simplified for Millennials

By | Business Insurance, Educate, Millennials, Personal Insurance, Uncategorized | No Comments

As millennials get older, understanding the home buying process is essential.

Picture of home: home buying process

During your 20’s, you are in your prime. You are continuing to find ways to start new chapters in your life. You graduate college, then you start your first job, next you rent your own place, and finally you are completely financially independent.

Once, you start to progress in life and start seeing increases in your bank account. You realize that most of that money is going to rent. You ask yourself, “Should I buy a home?”

This is the first step in the home buying process.

1. Decide If You are Ready to Be a Homeowner

The early phases of buying a home are exciting as you have limited responsibilities. You have no property to sell because you are simply renting. As the buyer, you have all the power and flexibility to choose what you want.

However, along with this freedom of choosing your dream home, considering if you are ready to make this commitment mentally, physically, financially is crucial. Ask these 5 Questions to Determine if You are Ready to be a Home Buyer.

Buying a home is a huge commitment mentally. You must be ready to live there for an extended period of time. Depending on the loan and monthly payment, it could take you over 15 years to pay off your house.

Answer these questions to determine if you are ready for the commitment.

This means not being able to hop around at will and relocate freely. If you do plan to commit mentally, do you plan to have a family? Will you be happy staying at your current job? All of these questions need to be asked when considering buying a home.

Physically, owning a home can be tough. Homeownership comes along with a lot of responsibility as you must take care of your lawn, maintain the structure (roof, exterior, interior, etc.), and be ready to fix it if breaks.

If your hot water take breaks or your furnaces blows out, be ready to take cold showers and live without heat. This is your home so this means this is your responsibility to take care of it. In these situations, you are most likely going to hire a contractor. But what if your windows need to be replaced? There’s a leak in your ceiling or your carpet needs repair?

These smaller tasks can be do-it-yourself jobs. Not only would it save you money, but it will take up your time and physical energy to figure it out. Hopefully you can keep these inconveniences to a minimum, but if you are faced with them keep this complete DIY Guide handy.

Now you have understood the commitment it takes to own a home mentally and physically, what about financially? This leads me to the next part of the home buying process:

2. Understand Your Finances

You should know down to the tee how much your monthly expenses are currently before you go any further in the home buying process. This is extremely important as your planning to make a huge purchase that could be an unpleasant financial burden if not planned out accordingly.

Think about your standard of living right now. How much money do you make right now per month? What type of house could you afford?

These questions must have definitive answers as your realtor and bank will provide variants. It is not uncommon for a bank to quote you for a mortgage that is 2x more than you can afford.

Understand the 30/30 Rule to Understand the Home Buying Process

The rule of thumb to use when deciding what type of house you can afford in the home buying process is using the 30/30 principle. This law states that you must be able to put down 20% of the total price and have 10% buffer left in the bank to cover any unexpected expenses.

For example, if you are looking to buy a $300,000 home you must be able to put down $60,000 and have $30,000 saved up in your bank account.

The theory driving this principle is that: The best time to purchase property is when you can afford it.

Follow the 30/30 rule and you should be prepared for the purchase, but if you are yet to have your money right make sure you take the steps necessary to save for your down payment.

In addition to saving up for your down payment, you need to make sure your credit score is in check when applying for loans. Aim for anything above 700 to ensure a reasonable interest rate on your mortgage.

Keep in mind any expenses that you are currently obligated to (those dreaded student loans) and combine them with all the unexpected expenses that come with owning a home.

To name a few, home inspections, property tax, insurance, and maintenance can add up. This is only the beginning so make sure you check out 11 Hidden Costs of Owning a Home.

Now that you understand where you are financially and where you need to be at, you need to find the right home as the next step in the home buying process:

3. Prospecting the Right Homes

Now, there are many factors when picking out the perfect home for you or yourself and spouse. This includes price, current condition of the home, location, and the market.

Knowing all the costs in addition to the retail price for a home, the costs can be expensive. In order to make this huge commitment physically, mentally, and financially you must understand your needs.

Do you want to live in the peaceful countryside? Would you prefer being in an upscale urban area or would you prefer a nice suburban area to start a family?

What lifestyle do you want to live?

The answers to these questions depend on the lifestyle you want to live. Do you want to start a family? Do you want to be close to the city for the social aspect? Would you rather live in the country side to pursue your outdoor hobbies?

Many of these questions have to deal with location. Different locations are associated with different tax amounts. Derek Carr the QB for the Las Vegas Raiders saved $8.7 million for the upcoming year in taxes alone for moving from Oakland to Las Vegas.

Not to mention location is extremely important when it comes to the school systems available to you and your kids if that is the route you plan to take.

After you figured out your lifestyle and location, you can start narrowing your search by looking at specific houses in the neighborhood.

What type of home do you want?

Some key things to remember when looking for specific houses in a neighborhood are: do you want to save money through a “fixer upper”, are you financially stable for the purchase of a brand new home, or would you prefer building it from scratch?

The most expensive option would be building it from scratch, but it would be well worth it. You are literally customizing every square inch of your dream home. This could be a viable option if your other prospective homes need repairs and if you are financially capable.

Even though a custom built home would be amazing, it’s expensive. However, there are really nice houses already made at reasonable prices.

In terms of looking at already built houses, understand all of the home buying deal breakers. This includes the roof, plumbing, flood zone, and more.

What could a faulty roof cost you?

A faulty roof could cost you over $10,000 so make sure you are buying a house with a roof that’s intact.

In terms of flood zones, use this tool provided by FEMA (Federal Emergency Management Agency) to find out what type of flood zone your house would be in. Depending on your flood zone, will determine the price of insurance you would have to purchase.

Any information needed to be learned can be found and purchased from the The National Flood Program.

Next, make sure you have a home inspector look at the house to examine the plumbing and electrical system of the house which could be very costly to replace.

After you know what your deal breakers are, you can confidently search for the right home. Do not get caught up on imperfections like paint and tile as you can make these repairs relatively inexpensively.

Make the Offer

Once you have made the commitment of buying a home, got pre-approved for your mortgage, saved up for the down payment, chose the house perfect for you, you are know ready to make an offer.

Please note you can always contact a trusted realtor during any step in the home buying process. This person will make sure all the necessary paperwork gets filed correctly along with any necessary inspections of the home to ensure quality.

Also, understand that buying a new home is a huge deal. There is a lot of paperwork. Be prepared to create a contract that clearly states the transaction taking place.

Most importantly, after that dream house is decided. You need adequate insurance coverage to protect it. The best way to find the best price is through an independent insurance agency who could quote your through a variety of insurance companies. Get a quote today!

Independent Insurance Agency or Captive?

By | Business Insurance, FAQ | 5 Comments

Independent Insurance Agency

Independent insurance agency or captive agency? Find out which route would provide you and your loved ones the best possible insurance policy.

The modern day customer looking for insurance has many options when shopping for insurance. An individual can choose to go with a well known captive agency, an independent insurance agency, or much more. There are unending options for you as the customer and it is very easy to fall in love with a brand and the lowest price versus the actual service or product. Check out America’s Most Loved Brands in 2015. That is why it is important to understand the difference between captive and independent agencies so you can make the best possible decision when it comes to insuring the people and property that you love the most.

CAPTIVE AGENCY

The captive agencies are usually the well known insurance companies you see advertising on television.  They are considered captive, because their agents can only offer products of their company for which they work for. These include State Farm, Allstate, Nationwide, and etc.

INDEPENDENT INSURANCE AGENCY

On the other hand, an independent insurance agency is able to provide insurance products from a wide array of insurance companies. The Brooks and Stafford Company is an independent insurance agency which has the opportunity to shop from several companies to find the best price and coverage that fits the clients’ needs.  Brooks & Stafford runs a quote through all these companies compared to a “State Farm” that is only allowed to sell insurance products that they have to offer. It is a numbers game. A company that sells products from several companies is more likely to find a better deal for the customer. Ultimately, independent agencies raise the probability of the customer finding the best deal with the best coverage suitable for them.

THE APPROACH

The Brooks and Stafford Company form relationships with their clients by getting to know them on a personal level beyond insurance. We are a Cleveland Insurance Agency that takes pride in having a live person answer every call, because we know how annoying it can be to call somewhere and hear an automated voice message system. Customer service and properly paying claims are why Brooks & Stafford has been around since 1849 (check out what was going on that year).

Brooks & Stafford has employees that work hard every day to service their clients and help them understand coverage. This is done when we educate and teach clients about the services and products we provide which is one way we try to differentiate ourself as an independent insurance agency. In other words, Brooks & Stafford have agents that serve as advocates of helping people find the best possible insurance plan for them to insure the things that mean the most. We focus on educating our clients to make the best possible decision in terms of buying insurance. That is why people choose Brooks & Stafford to insure all their needs.

Brooks & Stafford makes it possible to form relationships with all of their clients. This separates us apart from captive agencies that are nationwide. Either way, Brooks & Stafford has become a popular Cleveland Independent Insurance Agency because our clients enjoy when they have agents that are willing to understand their situation and find the best policy for them.

SUMMARY

An independent insurance agency can offer a multitude of coverages along with a wide range of prices based on the amount of companies they are affiliated with. A captive agency has limited amount of options for the client since the company can only offer that company’s product.

Finally, even though captive agencies have more capital to spend on advertisement does not mean that they offer a better or more trustworthy product than Brooks & Stafford or any other independent insurance agency.

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