You’ve got your loan, you’re buying your house, and now comes the tricky question: how do I want to handle my house insurance?

If you have a mortgage, home insurance is not an option.  Even if your house is paid off, you still want to keep your insurance.  But there’s a fine line between making sure there’s enough coverage to replace your house without paying high premiums for that coverage.  Here’s a few tips.

*Have a higher deductible.  This will lower your payments and save you money in the long run.

*Keep all your insurance in one place.  Have car insurance?  You’ll get a discount for keeping your insurance business with one agent.  Same goes for life insurance.

*Keep an inventory of your house’s contents, especially for big ticket items.  This includes any jewelry, furs or expensive electronics you possess.

*Make sure you insure those big ticket items.  Sure you want to replace the house, but you’ll want to replace the furnishings also.  Floors get mighty hard and cold at night.

*Make sure you let your agent know if you do anything to increase the value of your house, like a remodeling job, adding a pool or tacking on another room.

*Shop around.  You put a lot of time and energy into picking the house.  Give the insurance the same diligent consideration!

Now that the insurance is settled, time to sign the contracts and handle the big task.  Moving in.

You’ve decided to make the move from renting to owning and you’ve shopped around to find that “perfect” house for you.  Here are some tips to keep in mind before you sign the dotted line on that offer to purchase:

1. Make sure that you truly can afford the house.  Even if your bank has pre-approved you for a loan, you’ll need to make sure that you can afford the payments and the escrow for the property taxes based on your other monthly expenses.  You don’t want to be strapped into a payment that tightens your budget too much.

2. Don’t forget the home inspection contingency.  Especially if this is your first home, you’ll want to have a home inspection by a liscensed home inspector.  A good home inspection will walk you through the house, point out possible future problem areas as well as point out absolute problem areas.  Some home inspectors will even give you tips on how to “run” your new home.

3. Research the neighborhood and community.  Before you make that move, you want to make sure that you like the neighborhood.  Talk to people who live there, ask questions.  If you have kids or plan on having kids, research the schools and community activities that are important to you.

By making sure you cover your bases, your home purchase as well as your life in your new home will go more smoothly.

Reports state that foreclosures will account for 1% of all homes this year, the highest it’s been in 52 years.  While we could comment on the reason for the increase in foreclosures, we’re more interested in how to reap benefits from this new housing trend.

Foreclosed homes can be a bargain basement purchase, either for a potential rental, resale or even personal accommodations.  There are however a few aspects to be aware of.

Federally seized property such as those on FHA or VA loans are more likely to come with low downpayments and possibly repair allowances.  Banks typically have a department solely to deal with confiscated properties where owners have defaulted on their loans.

Sometimes the properties will be placed up for auction, but then priced at their appraised value which is no bargain for the buyer.  Some institutions will sell for the remaining amount of the outstanding loan, which again, has the potential to be nearly the full purchase price of the house.

The best way to determine if foreclosure purchase is the way to go is to do a little research.  Find out the price for the home and factor in the cost of repairs.  Compare this number to the asking price and the price of similar properties being sold in that area.

With a little luck, a little elbow grease and a touch of daring, you could have a fantastic new home for a fraction of your neighbor’s mortgages.

With the downturn in housing markets, people may wonder if they wouldn’t be better off going back to renting instead of buying a house.  Allow me to say, renting is never the prudent financial choice to make if you can help it.

Sure, you can rent an apartment for less than a house payment in most areas of the country.  But your money is going into someone else’s pockets who is getting the income, the tax breaks, and the slow building of a nest egg though equity.

For your $1000 rent a month, you could be making a mortgage payment with a guaranteed return on your money over time.  You could be writing off the interest on your taxes, and working towards house ownership, a comfortable place to be come retirement.

Prices are dropping with the market spiraling down.  Don’t let that discourage you from a house purchase.  Take advantage of the lower prices to get a bargain payment.  After all, renting is just as good an investment for you as flushing your money like toilet paper.

Are there ways to save your money when buying a new home?  Sure there are!  Financial planners will give you an abundance of advice using big terms on how to save your money.  I’d rather have the dish in plain language.  Pick and choose the ones that seem right for you.  Don’t feel you have to use them all, although if you can, great!

 
* Recycle the proceeds of your previous house sale into a down payment.  This will lower the amount of money you need to borrow.
* Ask about seller financing.  Somewhat risky, but if a sound contract is written, both parties benefit.
* Put down 20% of the sale price.  You’ll save yourself the mortgage insurance.  If you don’t have it upfront, make sure you notify your lender when you’ve paid in the 20% and that they’ve stopped charging you for it.
* Try to assume the existing house loan.  You’ll have a lower note than if you bought the house at market value.
* Pay points to lower your interest rate.  Sure it’s a chunk of change at the outset, but those lowered rates will save you thousands across the life of the loan.
* Play the “Who Wants to Hold My Loan?” game.  Lenders want your business.  Get them to compete a little for it.
* Good with your hands?  Buy a fixer-upper.  Nothing like a little sweat equity to make you smile.
* What’s one of the best deals around?  Foreclosures.  Banks are desperate to offload houses they’ve had to foreclose on.  These bargain beauties may need a little TLC, or not, but you’re guaranteed to get it for a deep discount price.