Your Scottsdale homeowners insurance policy provides coverage against most perils and damages. There are some, however, that are not covered. Unfortunately, those are usually the ones that catch you off guard — and they can be expensive. While every policy is different, you should peruse your Scottsdale homeowners insurance coverage to see if you're protected against termite infestation and mold damage.
Scottsdale Homeowners Insurance: Two Conditions That May Exist in Your Home
Contrary to popular belief, mold can rear its ugly head in almost any household. It's not uncommon for even the best maintained home to have a little mold somewhere. The most dangerous thing about mold is that it doesn't go away on its own, and unchecked it can spread undetected. Because hazardous mold problems can affect the health of the home's occupants, mold infestation should be treated immediately.
Combatting mold damage can be an expensive undertaking. As such, homeowners often turn to their Scottsdale homeowners insurance policy for coverage — only to find out they may or may not be covered. Here's why:
Mold is caused by excess moisture. Mold spores can thrive by coming into your home through windows and doors. A common cause of mold is a leak somewhere in your home. If the mold is a result of a leak that occurred due to a covered peril like a damaged roof or a water pipe that burst, it could be covered by your Scottsdale homeowners insurance policy. However, most homeowner's insurance policies contain specific mold exclusions. If the mold is a result of poor room ventilation, excessive crawlspace moisture, unrepaired water leaks or lack of home maintenance your policy probably doesn't cover it.
One of the biggest causes of mold damage is flooding. Since most standard Scottsdale homeowners insurance policies don't offer flood insurance, you'll find that unless you have a specific flood policy you won't be covered for mold damage caused as a result of flooding. To be absolutely sure about mold coverage, talk to your insurance company.
Another common problem that can plague a homeowner is termite infestation. Untreated or ignored, termites can cause serious structural damage to your home. In addition, as a general rule termite damage isn't covered by most Scottsdale homeowners insurance policies.
It's estimated that termites are responsible for over $5 billion in home damages each year. There are several steps you can take to prevent termite infestation and damage. Soil treatment, termite barriers and other preventative measures can give you peace of mind and guard against damage. Because termite damage isn't covered by insurance, it may be a good idea to consider hiring a pest control company to make sure your home is termite-free and that it stays that way.
Again, consult your Scottsdale homeowners insurance professional to find out what your coverage includes. And, since mold and termites typically aren't covered, they are probably good reminders that good home maintenance can prevent potential damage from those sources.
The old adage, "An ounce of prevention is worth a pound of cure" certainly applies when it comes to the value and condition of your home.
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Scottsdale housing is obviously affected by interest rates, and recently, the much anticipated rate hike by the Federal Reserve was once again put on hold because Fed Chairwoman Janet Yellen said she thinks the housing market is still not where it needs to be.
Jeff Taylor of Digital Risk appeared on Fox Business News after Yellen's comments about the housing market being depressed or distressed, countering her assertion that the housing sector is depressed, citing that housing indicators are at all-time highs.
Many in the Scottsdale housing sector have actually been hoping the Fed WOULD raise interest rates. Taylor points out some of the reasons why this thinking actually makes some sense…
Stay abreast on what the Fed does in the future with interest rates by continuing to follow us on Twitter and Facebook. We post daily there. Also stay abreast of the Scottsdale housing market by checking here frequently for more up to date news as it affects Scottsdale housing.
Once upon a time in the Scottsdale mortgage market, "adjustable rate mortgages" (ARMs) was a phrase that was shunned. During the Great Recession of just a few short years ago, many consumers experienced their mortgage payments spike to levels of unaffordability. Sadly, some of those homeowners fell victim to foreclosure. But what about now?
The Scottsdale Mortgage Arena: Are ARMs Making a Comeback?
Some mortgage industry experts say that adjustable rate mortgages are returning to popularity among some borrowers who consider them as a potential way to save money and more easily qualify for a mortgage loan. The Wall Street Journal recently reported that in 2013 roughly 22% of all mortgage amounts between $417,000 and $1 million were ARMs. In 2014 the percentage increased to 31% and appears to be climbing.
In the Scottsdale mortgage landscape it appears that most borrowers interested in adjustable rate mortgages plan to be in their home for a relatively short time period. And, if their employers transfer employees every few years, for example, an ARM may be a better fit than a traditional fixed rate mortgage. Consider this: a 30-year fixed rate mortgage may be higher than a five year ARM at a lower rate, saving the homeowner a considerable amount of money during those five years.
In addition, Scottsdale mortgage lenders have improved their ARM products through "hybrid" loans that can offer important features to some borrowers. Not only can borrowers save money during the first five years until their first rate adjustment, if there is one, but the adjustments are limited to how much the rate can increase.
For borrowers that have the financial wherewithal to take necessary action if their rate rises, ARMs may be a preference. However, some Scottsdale mortgage lenders caution average homeowners and recommend against getting "backed into a corner" with an ARM in which they have no control over a rise in interest rates. They also warn that the simple answer of refinancing if the rate increases is somewhat risky. Conventional rates may have also risen by that time and, of course, there are always closing costs associated with refinances.
So, ARMs may be worth a second look depending on your particular employment situation and risk tolerance. As usual, there's not a "one size fits all" Scottsdale mortgage.
Get more Scottsdale mortgage tips and informatiion by checking our other articles in the Scottsdale Mortgage Info section to your right under Scottsdale Real Estate Categores.
As Scottsdale mortgage borrowers continue to see home prices rise they have increasingly more equity to utilize. Industry experts say that nationwide home equity has risen by nearly $825 billion. That represents a 250% increase over home equity levels of just four years ago. However, tapping into that equity by using a home equity line of credit, or HELOC, is more challenging than ever.
HELOCs: A Scottsdale Mortgage Dilemma
Mortgage analysts report that HELOCs currently being extended to Scottsdale mortgage borrowers are principally reserved for those with extremely good credit. HELOC originations during the first quarter of 2015 reflected the highest average credit scores since that data has been recorded.
While HELOC lending has increased by 40% from a year ago, origination levels are 85% less than those of the housing boom of 2007. Most notably, in addition to record high credit scores, are the reasons Scottsdale mortgage borrowers are utilizing the home equity.
Mortgage lenders say the trend these days is for home owners to tap into their home equity for necessities rather than luxuries. Simply put, it’s more about what they need versus what they want. Plus, industry insiders say that most of the HELOC activity is relegated to wealthier homeowners in the more expensive housing markets. During the housing boom, Scottsdale mortgage borrowers were using the equity in their homes — and then some. Because housing values were artificially inflated and lenders did a poor job of restricting loan-to-value ratios, many homeowners found themselves in trouble when the job market experienced a slowdown and the economy softened. This was a key contributor to the housing crash, and many HELOC borrowers were faced with foreclosure.
Those that were able to weather the housing crisis have HELOCs that were originated between 2005 and 2007 and are nearing the end of their principal draw periods. These borrowers will soon be required to repay the principal and interest, adding on average roughly $250 per month to their mortgage payment. What’s worse is a large number — estimates are as high as 30% — of homeowners have loan-to-value ratios that exceed 85%, meaning a refinance will be difficult.
In summary, the Scottsdale mortgage market, as well as others throughout the country, will be scrutinized closely in the coming months to see how homeowners react to the impact of the HELOCs.
For more articles pertaining to the Scottsdale mortgage market, check out other articles in the Scottsdale Mortgage Info section of our site below our Scottsdale Real Estate Categories in the column to your right. Remember, we also post tips daily on Twitter and Facebook. Check us out there too.