Posts Tagged ‘sell’

  • 3 programs to help you buy a house if you can’t get a mortgage.

    Sold Home For Sale Sign in Front of New House
    I think that there are still challenges in today’s real estate market in either buying or selling a house. Suffice it to say that there are  a lot of folks who owe more than what their home is worth (“underwater”).  There are enough people who have credit problems because of the recession that started in 2007.  Lots of recent  college graduates are strapped with student debt and no jobs and living at home. The economic “recovery” has begun but it is taking forever. And certainly the banks and mortgage companies have not eased up that much on underwriting criteria for buyers. An average credit score to get a conventional mortgage is still almost in the mid 700s. FHA  and VA  are still options but I think we  need to do a better job in spreading the word on those programs and how they work. Plus there are concerns regarding FHA continuous funding. FHA mortgage insurance premium is the highest of any program and never goes away until you finally sell.

    I would speculate that with the uncertainty of the economy, that customers are just reluctant to take the risk in owning.

    I’ll offer a few alternatives that you might consider in getting  into the housing market. I mean you have to live somewhere. Might as well be a place of your own. Here are three for your consideration.

    1. Rent with an option to buy. Probably the most well-known and popular. However it can be the most misunderstood program. An “option” is exactly that. You enter into a  lease to rent a home and you agree with the owner that at some point in time you will, or will not, exercise the option to buy the house at an agreed upon price. You may or may not have put up any money toward that option at the lease signing. You and the landlord may have decided that a portion of the rent goes toward the purchase price or the option. Just remember if you don’t exercise the option, you just remain a tenant and have no ownership rights. Whether you get any money back is determined  by the terms of the option agreement.

    2. Lease purchase , land contract or installment contract.  Buyer and Seller enter into an agreement of sale for the purchase of property. The sellers maintain the title to the property during the term of the contract and the buyers have an equitable interest.  A note of caution here to both parties. If the seller has an existing mortgage on the property there may be and probably is a “Due on Sale ” clause in the mortgage documents. This will indicate that if any transfer of equity occurs then the entire loan will become due in full immediately. Depending on the size  of the existing loan, this could cause some major problems for both buyer and seller. Any real estate agent worth their salt will check all recorded documents before proceeding with a proposal. A good real estate attorney needs to be involved for each party. If there is no mortgage , then the owner can act as the bank and transfer title to the buyer . Depending on any down money and credit obligations the equity build up is subject to negotiations at the time of the offer. Again I would recommend a good real estate attorney get involved with any preparation for both buyer and seller.
    One nice benefit of this type of transaction is that the buyers can get the tax benefits of home ownership.

    3. New program. Just heard about this one. A company buys the home for you and the client enters into an agreement of sale to purchase the property within a certain period of time, i.e 5 years. You put up a down payment of 5 or 10% and pay a 3% admin fee to the company at the time of occupancy. You get the house and its yours to live in as a renter at an agreed upon monthly rent and purchase price. The big difference between this and the rent with option is if you do not get a mortgage by the end of the term you get your down payment back. They keep the 3%. You also agree to a 2-3 % annual rent increase during the term. Again this program is for people who have not been able to qualify for a normal mortgage because of unusual catastrophic circumstances.  Lost a job, unusually high medical bills, and then lost a home through foreclosure or just had some hard times and are trying to work yourself back.  That’s why you agree to a 5+ term. And of course if you can a mortgage sooner, there is no prepayment penalty. There are some additional features. Give me a call and we can discuss some additional details.

    A  few “options” to think about. Just leave me a comment. Contact me via Facebook, Linkedin or Twitter or the old fashion ways of email, salvatoreruta13@gmail.com or cell phone 6107372310

     

  • And the question is?

    MP900390083[1]
    Haven’t played Jeopardy in a while or watched it on TV. But I always thought that the premise was a good one. Give someone the answer and see if they can come up with the right question.  It occurred to me that I am usually walking around with what I think are  all the right answers to all kinds of questions. I guess  I might now recognize that I am somewhat pretentious in my conclusion.  I guess I need your help. How about I give you some answers and you give me what you think are the right questions. Hopefully, I can learn something with you and become a better agent.

    You know, years ago when I first got into the Real Estate business, I had a Broker who told me “Sam, you don’t sell real estate, you solve people’s problems”. That’s stuck with me and I think I have done a pretty good job in asking the right questions to solve those problems. But I think its time to get the customer’s take on this and get you to ask some questions. Anyway, lets see where we go with this and work together. I’ll give you the answer. You let me know what the questions should be. I’ll look at your questions and post them later to get some other folks to chime in if they think you are right wron.  Let me give you an example. 3.5% down payment  is the answer. The question might be,” What is an FHA mortgage ? ” Okay, lets give it a try.

    1.  Seller Assist is the answer. What is the question? This is the format which I won’t repeat every time. You’ll get the drift.
    2. No down payment required
    3. 28%/36%
    4. Buyer’s Agent
    5. Seller’s Agent
    6. Multiple Listing Service
    7. Escrow
    8. Radon Gas
    9. Short Sale
    10. Transunion, Experian, Equifax
    11. Title Insurance
    12.Prepaid Items
    13. 2 years worth of tax returns
    14. A real estate agent
    15. Purchase offer

    Okay, that’s enough for now. Give it a shot. Either comment below with your questions or email me if you like. The more I think about it there can be several different questions for the answers. In addition here is  a podcast that will explain how one might go about purchasing a multi family home where you can  live in and collect rent to help pay for your mortgage. If you would like to pursue that let me know. It can be challenging , but it can  be the start of a pretty good investment portfolio.

    Contact me at 610-737-2310 or email me at salvatoreruta13@gmail.com. Appreciate it.

  • Spring Market brings confidence, I think.

    Business Handshake

     

    I’m not one who just takes recent economic news as gospel. But having said that, it does look like we are moving forward with a better housing market. Just take a look at this recent post by Don DeZube of the National Association of Realtors.  Spring Market. You have to admit its pretty positive.  The increases are slight but are running ahead of  last year. The office that I manage is up about 6% over last year. That includes all categories: average sale price, less time on the market, list price of homes, total volume sold and total listing volume.

    If there is one problem, it’s that we do not have enough good salable properties on the market. The buyer demand is there and we find ourselves in multiple offer situations. The sellers are happy but the buyers are not. One  cause for the shortage certainly can be attributed in part to  thousands of properties still”underwater”, that is, the owners owe more than the house is worth. Banks are slow in approving possible short sales. Also the Feds have not extended the “debt forgiveness ” provision that allowed sellers to escape the tax consequences of such a sale. There is also some implication  that lenders are holding back millions of stalled foreclosures from the market in the hope that  rising prices will allow the lenders to recoup a larger return of dollars at the “Sheriff Sale”. Who knows…Plus under the new QM rules (Qualified Mortgage), underwriting guidelines are making it  much harder for the average home purchaser to qualify for a mortgage.

    Man Scratching Head

     

    Lenders are trying to address the above issues by loosing up certain underwriting criteria. Credit scores of 620 and in some cases 550 will get you into a home.  The fact that mortgage applications for all types of  loans are off in some cases 60% from last year might be one reason that lenders are looking for business with less than a truant officer’s mentality. If they don’t lend it, they are not going to make it. Not rocket science.

    Here is an explanation to help you better understand the “QM” rules.

    One last thing that I have mentioned  several times. If you are in financial trouble, wondering about whether you can stay in your home because you are behind in your mortgage, are considering bankruptcy or in a reverse mortgage and you have any questions, please give me a call. Don’t do anything drastic until you have a chance to talk to a  professional. I can recommend several that can help. Call me at 6107372310. No obligation.

     

  • So what’s the deal with the Stock Market? Gimme the House instead.

    Businessman Bouncing Over Stock Chart

     

    I don’t have a clue.  Used to be  able to gauge the housing market by what’s going on in the Stock Market.
    I gave up on that comparison a long time ago. To me it makes absolutely no sense. How can a barometer of the economy change so fast. I mean really, up 200 points one day, down 225 the next. I saw a pundit on a business show the other day that said traders are now using computer programs that make changes in a nano second. How is that possible? They buy, sell  and set the tone for the market before you or I even have a chance to act before our first cup of coffee. Crazy….  There is a thing called “Penny Stocks”. Companies that are looking for money and issue stocks that are worth literally  less than a penny a share. Okay……  I’ll buy a hundred shares for a dollar? Still sounds like a night at the Casinos to me. Kinda like playing the penny slot machines. Maybe I’ll hit it big and get a 1000% return.

    Wall street might be a dead-end for the average family.  But then there is the housing market. The great banking debacle of  2007 seems like a generation ago. Mention to a millennial that their grandparents actually had double-digit interest rates when they bought their first house, they look at you like  you have two heads. But it’s 2014 and there is a zero point 30 year fixed rate at 4.875%.  Pretty good.  The values of homes are rising again and home owners are looking at  increased equity. Buyers are coming out of hibernation but are still a little unsure of how to go about that purchase. One thing that is  a must, is that both buyers and sellers have to be reasonable in negotiating.
    Credit is still a concern but there are programs to address the buyer with as little as 580 credit score. How can that be? I have always said that there are only a few ways that banks can make money. The  main way is to lend it. The refinance boom is over for lenders. That means they have to go after purchasers of homes who need mortgages. Now is a great time to be a buyer and negotiate with a lender for a great rate.  For a really concise explanation of the current market and what you might need for a down payment and minimum credit scores  for  potential buyers, listen to this podcast.

    There is no getting away  from the financial trauma we all experienced over the last several years, but the housing market is coming back and there is no better investment for the average family. The volatility of the stock market is something that a lot of us just don’t want to risk, at least not right now. There’s something about an”Inverted Yield Curve” that leaves me wondering what it all means. Call me for housing info at 6107372310. Or email me at my new email address salvatoreruta13@gmail.com

  • Buy an investment property? Now is a great time thanks to FANNIE MAE.

    Well lets see, I can sit around thinking about the Presidential election and come up with some esoteric, ideological baloney that no one will believe anyway or actually give you some interesting real estate investment information that might even make you a couple of bucks if you act to buy some property.
    Well I picked this up from our friends at the National Association of Realtors. Seems like Fannie Mae is going to give a break to so called “Mom and Pop” Investors. You can now purchase up to 20 properties now and get a Fannie approval. The underwriting for those mortgages…. well that is a whole separate article that we can discuss later and that I would place under the heading of “Miracles in La La Land”. Oh ye of little faith. But what the heck. Give me a call if you have any questions. Good stuff.

    Visit houselogic.com for more articles like this.

    Copyright 2012 NATIONAL ASSOCIATION OF REALTORS®

  • Shopping for a Loan

     

    Can I Bid Online for a HUD Home?

    So you found the home of your dreams. Well you can finance it  a couple of ways; get a mortgage, ask the sellers to lend you the money or pay cash. Which one of these alternatives do you think you would use? I am not being a wise guy. A friend of mine who runs an upscale development told me yesterday that she has made 3 sales this month so far; all cash and all over $500,000. Maybe the market is coming around. What do you think?

    When you are ready to make an offer on a HUD home, that is, one that is owned by HUD, you need to use a Real Estate Agent.

    I don’t know where real estate buyers get the idea they can place a bid on a HUD Home without a real estate agent.

    Buyers cannot bid for HUD Homes online at HUDHomeStore.com

     

    The only way to place a bid is to work with a real estate agent who works at a HUD approved real estate brokerage. (Translation: That’s me!)

     

    Buyers are NOT able to submit bids on their own behalf.

    If you are going to make an offer on any  home but it is not HUD owned you do not have to use  a real estate broker unless it is listed by a real estate broker.

    A real estate agent will be glad to walk  you through the procedure in submitting a bid for your home.

    Here is another closed captioned video on Shopping for the loan.

    Don’t forget, If you want to find some homes to start your search, click on the link on the right side blog bar on “Finding a home in the Lehigh Valley.

    email me at samruta@yahoo.com or call me at 610-737-2310

  • Can I build the cost of repairs into my mortgage?

     

    Can I Build the Cost of Repairs Into My Mortgage?

     

    The FHA 203(k) Streamline loan product is intended to assist homeowners with basic repairs costing up to $35,000. (There is no minimum repair cost threshold.) It is designed to be an easy-to-use program for uncomplicated rehabilitation and/or improvements for which plans, consultants, engineers, and/or architects are not required. (More complex improvements are handled with the FHA 203(k) program that is described in another blog post.)

     

    Use of the Streamline (K) program is limited to properties with the following work category items:

     

    • Repair/replacement roofs, gutters and downspouts
    • Repair/replacement/upgrade of existing HVAC systems
    • Repair/replacement/upgrade of plumbing and electrical systems
    • Repair/replacement of existing flooring
    • Minor remodeling, such as kitchens, which does not involve structural repairs
    • Exterior and interior painting
    • Weatherization: including storm windows and doors, insulation, weather stripping, etc.
    • Appliances – when at least $3,000 of basic home repairs are involved.
    • Appliances may include freestanding ranges, refrigerators, washers/dryers, dishwashers and microwaves and may not exceed $2,000 in total cost
    • Improvements for accessibility for persons with disabilities
    • When a borrower applies for a Streamline(K) mortgage based on repairs identified in a pre-purchase home inspection, he must offer the FHA appraiser information regarding planned repairs and a copy of the pre-purchase home inspection. He must confirm that the repair is necessary and may be accomplished without the need for a fee consultant, work write-up, plans or exhibits. Additionally, the appraiser must note any health and safety deficiency that the proposed repair plan does not address.

     

    Repairs must comply with all local codes and ordinances and the borrower and/or contractor must obtain all required permits prior to the commencement of work.

    Any questions? samruta@yahoo.com or 610-737-2310

  • What really is a HUD Home?

     

    We hear a lot about buying a HUD home.  I thought I would throw together a basic primer for those of you who are interested in getting in on the action.  If you have any questions about anything below please let me know.

    What Is a HUD Home?

    HUD Homes comprise one of the largest inventories of foreclosed properties in the United States. They are owned by the United States Dept. of Housing and Urban Development (HUD) . A HUD Home is a property that has been lost by a previous owner in foreclosure to a bank or other lender, or a property that an owner has given back to the lender with a deed in lieu of foreclosure. Property owners facing financial difficulties are sometimes unable to keep up with mortgage payments. In the case of HUD Homes, the property owner is a person who obtained an FHA mortgage to purchase or refinance the property as a principal residence.

    There are currently over 500 properties in the Lehigh Valley that are either bank owned or classified as a “short sale” where the owners owe more than what the properties are worth.  The banked owned number 162. Some of those are actual HUD floreclosed properties. They are the real bargains that everyone keeps asking me about.

    A lending institution, such as a mortgage company, bank, or savings and loan association, funds the mortgage loan; the Federal Housing Administration ( FHA  ), an agency that is part of the U.S. Dept. of Housing and Urban Development (HUD), insures the mortgage. The mortgage insurance protects the lender from financial loss in the event the borrower defaults. When an FHA homeowner defaults on an FHA loan and the bank takes the house back in foreclosure, the lender has two choices about the disposition of the property:

    1. The lender may decide that there is sufficient equity in the house to turn a profit; it may keep the property and sell it as part of its Real Estate Owned (REO) inventory.
    2. Or, the lender may “cash in” on its FHA insurance policy and turn the property over to HUD. HUD adds the property to its pool of properties in the HUD Homes For Sale REO Program.

    There are several other ways HUD takes ownership of properties:

    • Deed in Lieu of Foreclosure:  Properties conveyed to HUD by a mortgagee following a deed-in-lieu of foreclosure of an FHA insured mortgage. In this case, the borrower gave the property to the lender without a foreclosure sale and the lender filed a claim for FHA mortgage insurance.
    • Custodial Properties:  Properties secured by a second mortgage or home equity conversion mortgage (HECM). These properties are in default and upon inspection by the Field Services Manager (FSM), determined to be vacant or abandoned.
    • Foreclosed Secondary Held Mortgages (SHMs):  Properties acquired as the result of the foreclosure of a mortgage serviced by HUD including assigned and purchase money mortgages.
    • Home Equity Conversion Mortgages (HECM):  Properties acquired as the result of foreclosure of a reverse mortgage insured by FHA.
    • Legal Settlement:  Properties acquired as a result of a lawsuit or for other reasons. Sometimes HUD accommodates another federal agency to dispose of real estate assets not insured by FHA.
    • Repurchases/ Buy Backs:  Properties repurchased by HUD to resolve a post sale claim by the purchaser of a HUD Home.
    • 184s :  Properties located on Indian or tribal lands and acquired as a result of foreclosure of a loan guaranteed by HUD’s Office of Native American Programs (ONAP) under the Section 184, Loan Guarantee for Indian Housing.
    • 312s :  Properties acquired as a result of foreclosure of a HUD Community Planning and Development’s Rehabilitation Mortgage.

    Tune in later in the week for part 2, ” Do I qualify for a  HUD Home?” In the meantime if you would like a list of HUD Homes, call me or email me from the contact information on the right.

  • 50% HUD Homes Discount

    Here’s a program that needs some awareness. Pretty neat.

    Give me a call or email me and I’ll send you a list of homes that meet the requirements.

    Law enforcement officers, pre-Kindergarten through 12th grade teachers and firefighters/emergency medical technicians can become homeowners through HUD’s Good Neighbor Next Door Sales Program. HUD offers a substantial incentive in the form of a discount of 50% from the list price of the home.  In return you must commit to live in the property for 36 months as your sole residence.

     

    How the Program Works

     

    Eligible Single Family homes located in revitalization areas are listed exclusively for sales through the Good Neighbor Next Door Sales program. Properties are available for purchase through the program for five days.

     

    How to Participate in Good Neighbor Next Door

     

    Check the listings at HUDHomeStore.com for your state. Follow the instructions to submit your interest in purchasing a specific home. If more than one person submits on a single home a selection will be made by random lottery. You must meet the requirements for a law enforcement officer, teacher, firefighter or emergency medical technician and comply with HUD’s regulations for the program.

    HUD requires that you sign a second mortgage and note for the discount amount. No interest or payments are required on this “silent second” provided that you fulfill the three-year occupancy requirement.

    The number of properties available is limited and the list of available properties changes weekly.

    Good Neighbor Next Door FAQs

     

    Q: What Is the Good Neighbor Next Door (GNND) Sales Program?

     

    A: HUD wants to strengthen America’s communities. The Good Neighbor Next Door Program offers HUD owned single family (one-unit) homes to eligible participants at a 50% discount.

     

    Q: Am I Eligible for the GNND Sales Program?

     

    A: Law enforcement officers, teachers and firefighters/emergency medical technicians and who meet all other requirements of the program are eligible to purchase an available home.

     

    Q: How Much of a Discount Can I Get on a HUD Home?

     

    A: You can get a 50 percent discount off the HUD appraised value. For example, if HUD lists a home at $100,000, you can buy it for $50,000 provided, you occupy the home as your personal residence for the required occupancy period. If you qualify for any FHA-insured mortgage program, your downpayment is only $100 and you may finance closing costs.

     

    Q: What Kind of Mortgage Financing Do I Need?

     

    A: You may use FHA, VA, or conventional mortgages, or cash. HUD requires you to sign a Second Mortgage and Note on the discounted amount (which is $50,000 in the example above). No interest or payments are required on this “silent second” mortgage if you live in the home for the entire 36 month occupancy period. You may be required to pay a pro-rata portion of the discount to HUD should you fail to fulfill the three year occupancy requirement.

     

    Q:  What is the Occupancy Period?

     

    A: You must live in the home as your sole residence for a full 36 months. The purpose of the program is to strengthen communities by encouraging employed, professional law enforcement officers, teachers and firefighters/emergency medical technicians to live in the community. You will have 30, 90 or 180 days to move into the home you purchase, depending on HUD’s determination of the condition of the home and the level of repairs that may be required, if any. The 30th, 90th or 180th day is the start date for the occupancy period. Your are released from all obligations under this program at the end of the 36th month following the start date. HUD views the occupancy obligation seriously and vigorously pursues violators to the fullest extent of the law.

     

    Q:  What Is an FHA Rehabilitation Mortgage and How Can It Help Me Buy a HUD Home?

     

    A:  The FHA 203(k) mortgage program helps homebuyers buy a home and have enough money to rehabilitate or repair it. Repairs must cost more than $5,000. The cost of the repairs and the mortgage are combined into a single monthly payment. Consider FHA?s 203(b) program if needed repairs are under $5,000. FHA also has a new Streamlined 203(k) program which may be useful. Discuss these financing options with your lender!

     

     

    Q:  Can I Sell the GNND Home after 3-years and Keep the Profit?

     

    A:  Yes. After you live in the GNND home 3 years, you can sell the home and keep any equity and/or appreciation.

     

    Q:  Do I Have to Use a Real Estate Broker or Agent to Buy a GNND Home?

     

    A:   Yes.

     

    Q:  Do I Have to Be a First Time Homebuyer to Take Advantage of the Program?

     

    A:  No. However, you may not own any other residential real property at the time you submit your offer to purchase a home and for one year previous to that date. For example, if you submit an offer to purchase a home on August 1, 2007, you may not have owned a home during the period from July 31, 2006.

     

    Q:  Where Are These Homes Located?

     

    A:  The HUD homes are located in designated Revitalization Areas. There are hundreds of Revitalization Areas located in the United States.

     

    Q:  Does HUD Provide a Home Warranty?

    A:  No. All GNND homes are sold “as is,” without any kind of warranty. You may hire a home inspector, however.

     

    Q:   Can I Buy Multiple Unit Properties (E.g., Duplexes, Triplexes, Etc.) through the Officer Next Door Program?

     

    A:  No. You can only buy single unit homes, townhouses, and condominiums through the GNND Program.

     

    Q:  Do I Have to Pay Earnest Money or Other Deposits in Order to Submit a Contract for a GNND Home?

     

    A:  Yes. The amount of the earnest money deposit required is an amount equal to one percent of the list price, but no less than $500 and no more than $2,000. HUD considers all offers to be a commitment to purchase a home if you are awarded the sale. Therefore, please carefully consider your offer and be aware of HUD’s policy on earnest money as stated here: If an offer is accepted, the earnest money deposit will be credited to the purchaser at closing. If the offer is rejected, the earnest money deposit will be returned. Earnest money deposits are subject to total forfeiture for failure of the participant to close a sale.

     

    Q:  Can I Bargain with HUD on the Price of a GNND Property?

     

    A:   No. You must offer the exact HUD list price when bidding on any GNND property. Then you get a 50 percent discount off of that list price.

     

    Q:  What if I Leave the employment, that made me eligible, for Any Reason, during the Mandatory 3-year Residency Period?

     

    A:  Nothing happens, but you must continue to live in the home for the full 36-month mandatory occupancy period. If you move out of the GNND home, you will have to repay HUD on a prorated schedule. In addition, you must certify that it is your good faith intention to remain employed as a law enforcement officer, teacher or firefighter/emergency medical technician for one year beginning with your purchase. Do no attempt to participate in the program if you know in advance that you will not be employed as required for at least one year.

     

    Q:  Some Agencies Have Other Homebuying Programs. Can the GNND Program Work in Conjunction with These?

     

    A:  Yes, as long as you can meet all the GNND program rules while participating in these other programs.

     

    Q:  What Happens if a Participant Fails to Honor the 3-year Occupancy Requirement?

     

    A:  HUD can demand repayment of the discounted amount on a prorated basis. That means you would have to repay 1/36th of the discount you received for each month that you did not occupy the home. HUD also may initiate administrative sanctions including, but not limited to, barring the officer from participating in any HUD/FHA programs, as well as other federal programs. In any case of fraud or abuse, HUD will refer the case to HUD’s Office of the Inspector General for investigation and possible criminal prosecution. HUD may also notify the officer’s employing agency. Criminal prosecution and conviction for fraud and abuse concerning the GNND Program can result in a fine of up to $250,000 and/or two years in federal prison.

     

    Q:  How Does HUD Enforce the 3-year Residency Requirement?

     

    A:  The participant must certify he or she is living in the GNND home as a sole residence at the time of purchase and each year after that. HUD can conduct spot checks to make sure the GNND home is your sole residence at any time during the 3-year period. You also must sign a note and mortgage for the discount amount. HUD may foreclose this mortgage if you do not comply with the 36-month occupancy requirement

    Don’t forget if  you have any questions contact me using the info on  the right sidebar.

     

  • 12 Ways to Lower Your Homeowners Insurance Costs

    12 Ways to Lower Your Homeowners Insurance Costs

    Prepared by Insurance Information Institute

    Presented as a public service by Salvatore Ruta and Choice Properties
    The price you pay for your homeowners insurance can vary by hundreds of dollars, depending on the insurance company you buy your policy from. Here are some things to consider when buying homeowners insurance.
    1. Shop Around.It’ll take some time, but could save you a good sum of money. Ask your friends, check the Yellow Pages or contact your state insurance department. (Phone numbers and Web sites are listed here.) National Association of Insurance Commissioners (www.naic.org) has information to help you choose an insurer in your state, including complaints. States often make information available on typical rates charged by major insurers and many states provide the frequency of consumer complaints by company.Also check consumer guides, insurance agents, companies and online insurance quote services. This will give you an idea of price ranges and tell you which companies have the lowest prices. But don’t consider price alone. The insurer you select should offer a fair price and deliver the quality service you would expect if you needed assistance in filing a claim. So in assessing service quality, use the complaint information cited above and talk to a number of insurers to get a feeling for the type of service they give. Ask them what they would do to lower your costs.Check the financial stability of the companies you are considering with rating companies such as A.M. Best (www.ambest.com) and Standard & Poor’s (www.standardandpoors.com) and consult consumer magazines. When you’ve narrowed the field to three insurers, get price quotes.2. Raise Your Deductible.Deductibles are the amount of money you have to pay toward a loss before your insurance company starts to pay a claim, according to the terms of your policy. The higher your deductible, the more money you can save on your premiums. Nowadays, most insurance companies recommend a deductible of at least $500. If you can afford to raise your deductible to $1,000, you may save as much as 25 percent. Remember, if you live in a disaster-prone area, your insurance policy may have a separate deductible for certain kinds of damage. If you live near the coast in the East, you may have a separate windstorm deductible; if you live in a state vulnerable to hail storms, you may have a separate deductible for hail; and if you live in an earthquake-prone area, your earthquake policy has a deductible.3. Don�t confuse what you paid for your house with rebuilding costs.The land under your house isn’t at risk from theft, windstorm, fire and the other perils covered in your homeowners policy. So don’t include its value in deciding how much homeowners insurance to buy. If you do, you will pay a higher premium than you should.4. Buy your home and auto policies from the same insurer.

    Some companies that sell homeowners, auto and liability coverage will take 5 to 15 percent off your premium if you buy two or more policies from them. But make certain this combined price is lower than buying the different coverages from different companies.

    5. Make your home more disaster resistant.

    Find out from your insurance agent or company representative what steps you can take to make your home more resistant to windstorms and other natural disasters. You may be able to save on your premiums by adding storm shutters, reinforcing your roof or buying stronger roofing materials. Older homes can be retrofitted to make them better able to withstand earthquakes. In addition, consider modernizing your heating, plumbing and electrical systems to reduce the risk of fire and water damage.

    6. Improve your home security.

    You can usually get discounts of at least 5 percent for a smoke detector, burglar alarm or dead-bolt locks. Some companies offer to cut your premium by as much as 15 or 20 percent if you install a sophisticated sprinkler system and a fire and burglar alarm that rings at the police, fire or other monitoring stations. These systems aren’t cheap and not every system qualifies for a discount. Before you buy such a system, find out what kind your insurer recommends, how much the device would cost and how much you’d save on premiums.

    7. Seek out other discounts.

    Companies offer several types of discounts, but they don’t all offer the same discount or the same amount of discount in all states. For example, since retired people stay at home more than working people they are less likely to be burglarized and may spot fires sooner, too. Retired people also have more time for maintaining their homes. If you’re at least 55 years old and retired, you may qualify for a discount of up to 10 percent at some companies. Some employers and professional associations administer group insurance programs that may offer a better deal than you can get elsewhere.

    8. Maintain a good credit record.

    Establishing a solid credit history can cut your insurance costs. Insurers are increasingly using credit information to price homeowners insurance policies. In most states, your insurer must advise you of any adverse action, such as a higher rate, at which time you should verify the accuracy of the information on which the insurer relied. To protect your credit standing, pay your bills on time, don’t obtain more credit than you need and keep your credit balances as low as possible. Check your credit record on a regular basis and have any errors corrected promptly so that your record remains accurate.

    9. Stay with the same insurer.

    If you’ve kept your coverage with a company for several years, you may receive a special discount for being a long-term policyholder. Some insurers will reduce their premiums by 5 percent if you stay with them for three to five years and by 10 percent if you remain a policyholder for six years or more. But make certain to periodically compare this price with that of other policies.

    10. Review the limits in your policy and the value of your possessions at least once a year.

    You want your policy to cover any major purchases or additions to your home. But you don’t want to spend money for coverage you don’t need. If your five-year-old fur coat is no longer worth the $5,000 you paid for it, you’ll want to reduce or cancel your floater (extra insurance for items whose full value is not covered by standard homeowners policies such as expensive jewelry, high-end computers and valuable art work) and pocket the difference.

    11. Look for private insurance if you are in a government plan.

    If you live in a high-risk area — say, one that is especially vulnerable to coastal storms, fires, or crime — and have been buying your homeowners insurance through a government plan, you should check with an insurance agent or company representative or contact your state department of insurance for the names of companies that might be interested in your business. You may find that there are steps you can take that would allow you to buy insurance at a lower price in the private market.

    12. When you’re buying a home, consider the cost of homeowners insurance.

    You may pay less for insurance if you buy a house close to a fire hydrant or in a community that has a professional rather than a volunteer fire department. It may also be cheaper if your home’s electrical, heating and plumbing systems are less than 10 years old. If you live in the East, consider a brick home because it’s more wind resistant. If you live in an earthquake-prone area, look for a wooden frame house because it is more likely to withstand this type of disaster. Choosing wisely could cut your premiums by 5 to 15 percent.

    Check the CLUE (Comprehensive Loss Underwriting Exchange) report of the home you are thinking of buying. These reports contain the insurance claim history of the property and can help you judge some of the problems the house may have.

    Remember that flood insurance and earthquake damage are not covered by a standard homeowners policy. If you buy a house in a flood-prone area, you’ll have to pay for a flood insurance policy that costs an average of $400 a year. The Federal Emergency Management Agency provides useful information on flood insurance on its Web site at FloodSmart.gov. A separate earthquake policy is available from most insurance companies. The cost of the coverage will depend on the likelihood of earthquakes in your area. In California the California Earthquake Authority (www.earthquakeauthority.com) provides this coverage.

    If you have questions about insurance for any of your possessions, be sure to ask your agent or company representative when you’re shopping around for a policy. For example, if you run a business out of your home, be sure to discuss coverage for that business. Most homeowners policies cover business equipment in the home, but only up to $2,500 and they offer no business liability insurance. Although you want to lower your homeowners insurance cost, you also want to make certain you have all the coverage you need.

    samruta@yahoo.com