Category Archives: Personal 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!

7 Tips to Save Money on Homeowner’s Insurance

By | Educate, FAQ, Personal Insurance | 15 Comments

homeowner's insurance[Photo Credit: mschellhase]

Are you a homeowner? Do you think you pay way too much money for homeowner’s insurance? You are not alone as many Americans do not understand the full value of homeowner’s insurance until a tragic event occurs. However, after purchasing a home, homeowner’s insurance is essential. Here are a few concepts that you should know that will save you money on homeowner’s insurance.

Homeowner’s insurance can be an unpleasant process when you are paying way too much for a policy that does not provide sufficient coverage. When you know these 7 Tips to Save Money on Homeowner’s Insurance the process of finding the right homeowner’s insurance policy with the best company becomes simple. Knowing 5 Ways to Save Money on Auto Insurance helps too. By knowing these tips, not only will some insurance companies reward you with a discount, but you will also be creating a safer environment for you and your loved ones.

 1. Multi-policy discount

A homeowner’s policy paired along with an auto insurance policy is one of the most cost effective and convenient ways to save money. Most insurance companies will reward you for packaging your home and auto policy together. Traveler’s Insurance is one of these companies that offer a multi policy discount.

In addition, some auto policies differ in length and renewal dates compared to homeowner’s insurance policies. Paying multiple bills can start to get confusing when different renewal periods come around. Instead of keeping up with renewal dates and separate checks, buying two policies through the same company will be able to provide convenience as well.

 2. Preventive Device Discount

For the most part, this discount is almost a given if you live in a house that was not built before the 1950s. The preventive device discount is offered by a majority of companies that reward people for implementing devices that will prevent or limit the damage to your home.

For example, if you have working smoke alarms placed strategically throughout your house then you have most likely earned yourself a discount. Smoke alarms are great for insurance companies because they lower the overall risk of a fire. The National Fire Protection Association demonstrates how to install a smoke detector on your own. Having smoke alarms will help prevent a fire from happening and it will also prevent you from filing a claim that would increase your monthly premium. Now that you know the benefits and how to install a smoke alarm, there is no excuse to miss out on this opportunity to save.

The same goes for burglar alarms. These devices notify the owners of the house that someone has broken in or is trying to break in. Not only will burglar alarms prevent thieves from creating one costly claim, but it will be rewarded by some insurance companies.

Fire and theft are two big concerns for homeowners which make burglar alarms and/or smoke alarms great ways to minimize the risk for filing a claim. That is why these devices are rewarded by some insurance companies. Call your insurance agent today to see if you received a discount.

3. Claim Free Period

Insurance is all about controlling risk. A large group of people pay small amount of money (respectively) to cover the expense of a handful of tragic events. However, everyone must be insured as a tragic event could happen to any one of us as we all having some degree of risk associated with our property.   A riskier option you are or may become makes you less appealing to an insurance company. The amount of risk explains why the same amount of coverage for one individual might be higher than the other.

You may be wondering how insurance companies will determine risk for a homeowner’s policy. There is a strenuous process of assessing risk upon each individual homeowner’s policy situation as this is known as the underwriting process. During this process, underwriters look at a multitude of factors including: age and condition of electrical – plumbing – HVAC & roof systems, credit score, year the house was built, upkeep and amount of claims on the property. As a big factor on influencing premium prices, the frequency and severity of claims made on the property can drastically change how much you pay.

On average, one claim will increase your monthly premium by 9%. That might not seem like a lot but it will definitely add up once those bills consistently come in at a higher rate. With that being said, 9% is the overall average and each state varies. Click here to see how your state compares.

As you can see, one claim will affect your rate. This is because one claim most likely leads to another. In addition, property that includes a track record with past claims does not look good. Property with zero claims compared to property with more than one obviously looks more of a risk adverse option for insurance companies. This is why some insurance companies offer discounts to customers that have a clean record with no claims during a period of time.

It is not easy to avoid claims and you will get rewarded by doing so by a handful of companies. Minimize risk and avoid filing small claims to minimize that monthly premium.

4. Newly renovated or recently purchased

Think about it from the perspective of an underwriter for an insurance company, which houses would be great candidates for homeowner’s insurance policies? Newly renovated or recently purchased homes. Here’s why.

Roofs are one of the first things that underwriters are curious about when they are in the process of evaluating risk for a homeowner’s insurance policy. A roof that is poorly installed or very old can cause many problems. These problems can come in the form of leaks, collapses, and severe damage to the inside of a beautiful home.However, newly renovations and new home buyers should always look at the condition of the roof when considering buying or making renovations, because it is one of the most important aspects of the house.

Also, knob and tube wiring versus circuit breakers are a topic of interest for insurance companies when writing a policy for homeowner’s insurance. Knob and tube wiring are definitely a reason for concern as this was the method used for houses in the 1930’s and beyond. This method is not only outdated by current technology, but it is dangerous. Knob and tube wiring exposes the wiring and increases the risk of accidents. See a picture of this method to see if your home has it.

Avoid this knob and tube wiring and have a certified electrician examine your home. They will implement a more modern system such as circuit breakers which will ground the wiring and provide a safer alternative. As a result, a handful of insurance companies will reward you with a discount.   These are only two of many aspects of your house that need to be updated and renovated that will end up saving you money in the long run. Call a home inspector today to see if you need any updates!

5. Loyalty discount

Loyalty is something that gives more meaning and attachment between two things. Varying degrees of loyalty are present in our relationships with loved ones or coworkers, the attachment we have with our current jobs, and our dedication to certain brands. Either way, we are faced with struggles of staying loyal and it is becoming harder during this day and age as options continue to grow.

The Bureau of Labor Statistics came out with a study in 2015 that said that the average person before the age of 40 will have on average, 10 jobs. It is very rare that a person has the opportunity to stay loyal to one job for their lifetime. Check out this link to see how many jobs on average are predicted for millennials.

This statistic along with many provides evidence that loyalty is hard to come by. As a result, loyalty will be rewarded by some insurance companies when it comes to buying homeowner’s insurance. Loyalty may be judged different depending on the company. Call your insurance agent today and see if you qualify for a loyalty discount (if applicable).

6. Early bird discount

Insurance companies want clients that are going to be low risk so they can make money. They want to insure people that are dependable. That is why an early bird discount is in place.

Some insurance companies offer a discount to individuals that shop for their homeowner’s insurance policy far in advance of their renewal date. A person that allows insurance companies enough time to write the right policy for them by having enough time to do so deserve a discount. The people that wait last second until their renewal date will simply not receive the discount. This is easy money saved people!

P.S. Do not get too excited as not all insurance companies offer this discount when issuing homeowner’s policies.

7. Elderly discount

Being considered elderly is not that bad, as it has its perks. Studies have shown that people above the age of 65 are actually one of the happiest groups of people. Think about it. At this time, you are most likely retired, have the opportunity spend more time with family, have grandkids and receive many discounts at restaurants. However, the best reason for getting old is that you receive a discount on your homeowner’s insurance premium for the most part (just kidding, there are better things).

Strive to live long healthy lives so you are able to receive this magnificent perk of becoming old along with many others.

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That’s How you Save on Homeowner’s Insurance

This wraps up 7 Tips to Save Money on Homeowner’s insurance. A homeowner’s insurance policy can become expensive. Insurance companies offer different ways to save you money. All you need to do is find out what they are and start implementing these money saving strategies today.

Keep in mind that all insurance companies offer different discounts for homeowner’s insurance. These are only seven of many ways to save money on homeowner’s insurance and many are not on this list such as varying your deductibles. Not all of these tips listed above will guarantee a discount for your homeowner’s insurance policy so it is your job to become more educated on your policy. This way you can save hundreds of dollars each year by simply implementing strategies that will create a safer environment for you and your loved ones.

5 Easy Ways to Save on Auto Insurance

By | Personal Insurance | 5 Comments

Are you paying way too much money on auto insurance? Have you been with your insurance agent for a while and want to know how to save money on your current policy? If you answered yes to one or both of these questions, then you have come to the right place.

The Brooks & Stafford Company is an independent insurance agency located in the heart of downtown Cleveland who is known for shopping for the most competitive rate when it comes to auto insurance. As an independent Cleveland Insurance Agency, Brooks & Stafford partners with multiple companies and offers insurance to potential clients. However, not everyone is fortunate to work with an independent agency so learning universal ways to save money on auto insurance can be significantly beneficial.

Multi-Car Discount

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Photo credit: Jason Cartwright

You might not own three Mustangs, but you most definitely could have more than one car. If that’s the case, look into how putting more than one car on the same auto insurance policy could save you money.

If you have more than one car, then make sure all of your vehicles are on one policy as most insurance companies will reward you with a discount for having a multi-car policy. If your insurance company does not reward you with this discount,  contact this Cleveland Insurance Agency as they can get you this discount.

Package Discount 

6136046271_b2ba6d755c_bPhoto credit: Reshma Muralitharan

Not everyone knows about this discount as many have separate insurance policies with different companies for their home and auto insurance policies. For whatever reason that may be, you should consider contacting your insurance agents and see which company could give you the best rate with both properties tied to the same company due to the package discount.

Along with a multi-car discount, insurance companies try to offer the package discount as they try to up sale more of their insurance products. Any vehicle insured that happens to be on the same policy as a homeowner’s policy will receive a package discount. Insurance companies have representatives that are continuously trying to up-sell insurance products and this package discount is a direct result.

Good-Grade Discount

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Teens getting their license that begin driving represent a significant amount of risk for an insurance company. However, a teen with good grades in school helps the insurance company evaluate the amount of risk by promoting success in the classroom. That is why an insurance company rewards individuals enrolled in school that have good grades with lower rates on auto insurance.

Move to or Stay in Ohio 

IMG_5877Now that Ohio is the home of the 2016 NBA Champions many people are making Cleveland as a topic of interest, but this is not the only reason to move to or stay in Ohio. Ohio has specific state insurance laws that make it special compared to other states.

Ohio is considered the 2nd best place to have auto insurance because it is the 2nd most inexpensive place on average. See what makes auto insurance in Ohio different and how your state compares to the rest. Ohio is a state that contains a competitive market for insurance as several hundred insurance companies are trying to compete with one another by offering the best price to consumers.

Drive Less

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Photo Credit: salamancaenbici.com (cropped)

Try riding your bike to work or taking the rapid. If you live downtown or live close to work, riding to the office is a great way to start the day off right. Get the blood pumping in the morning along with the thought of saving money on gas will result in a fantastic start to the day. In addition, taking public transportation such as the rapid or bus are other alternatives to driving. This option will allow you to read and potentially help bypass during rush hour traffic.

Not only will it help preserve the environment by limiting pollution, but it will decrease the probability of filing an auto claim. The less amount of time spent on the road driving means fewer opportunities there will be to get into an accident. There might not be a concrete discount for this, but according to statistics it will pay off in the long run.

These are five easy ways to save money on your auto insurance as these are changes you can make today!

Saved on Auto Insurance and Want More Tips?

For similar interests, read 7 Tips to Save Money on Homeowner’s Insurance. If you are interested in learning about the other ways to save money on your auto insurance, call a representative at Brooks & Stafford at 216-696-3000 or check out our website.

 

 

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