(My guest blogger for this issue is Aaron Nieman, owner of Aaron R Nieman Insurance Agency.)

You may have heard how lenders are now requiring that borrowers on townhomes and condos carry an HO6 policy. This is what some people call a Contents Insurance policy. An important question to ask is why do you think this is happening?

Let’s use an example with another insurance coverage that most people have. Imagine getting into a car accident and showing up at the repair shop to find that the insurance company had your vehicle completely repaired, except for the interior. You look inside the car and find no seats, steering wheel, dashboard… etc. Now they need additional money from you to buy and install these items. What would you do?

This is the same situation that banks are in should something happen to the condo or townhome they own, as they are the owner until you pay them off. If there is a fire, flood, or any insurable event, most master policies for homeowner’s associations do not cover the interior. This means that the carpet, cabinets, drywall, fixtures, and doors, to name just a few items in that condo, are not getting repaired. So, banks are now requiring that you carry a policy to cover this important asset.

In my opinion, this is something that was long overdue. This has always been a gap in coverage that leads to a lot of problems. In most cases, an HO6 policy can be as inexpensive as $12 a month, depending on how much coverage you need. However, with most insurance companies, adding this coverage will qualify you for a home auto discount on your auto policy, which will lower your auto insurance payment, bringing your net cost down.

While this may give you a brief overview of this issue, there is more to consider when looking at an HO6 policy. Some more important things to ask yourself and the insurance professional that you work with are:

— What is the amount that my interior needs to covered at?
— How much would I need to replace all of belongings?
— How does the deductible I choose for this policy effect the rate?
— Will this policy cover injury on property due to negligence (i.e. liability coverage)?
— What amount of liability coverage is appropriate for me?

Feel free to contact me anytime should you have any questions. Don’t just get a policy, understand why need it and make sure the coverage is appropriate for your situation.

Aaron_Nieman

Aaron_Nieman

Aaron R Nieman
Aaron R Nieman Insurance Agency
9785 South Maroon Circle Suite 312
Englewood, CO 80112
Office   303-645-8036
Cell      720-422-8190
Fax      303-645-8039

[Aaron Nieman is the owner and operator of the multi-award-winning Aaron R. Nieman Agency of American Family Insurance. The agency has been around for more than five years. J.D. Power & Associates awarded Aaron with the prestigious Award of Excellence for being in the top 20% for agent customer service in the field of insurance. Additionally, the agency has won multiple company awards. Aaron and his agency’s promise to his clients is that you will not receive better service with the right amount of coverage for a lower amount of premium.]

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(My guest blogger for this issue is Jose Luna, managing broker of HomTur Realty.)

Should Getting Out Of Debt Be Your Number 1 Priority?

I was surfing the internet researching articles about real estate. The articles I came across talked about a possible second wave of foreclosures that are looming. Lots of details and statistics about delinquency rates and the number of people in option ARM loans that are causing themselves harm by paying the minimum amount on their mortgages.

I recommend that getting out of debt be your number one priority for two reasons. First, you will find yourself in a crunch you didn’t predict and become a part of a statistic , and second, you can take advantage of some of the tremendous opportunities that will be available. If you believe that the best opportunities appear when there is chaos, then prepare now. Will you be ready the next time opportunities present themselves? Or will you be saying once again, “Darn, I don’t have the money to jump on this opportunity.”

Here’s what one article reads…

“All signs point to a new flood of real estate foreclosures that no amount of government sandbagging will prevent. Sources of trouble:

— A record 7.58 percent of U.S. homeowners with mortgages were at least 30 days late on payments, says Equifax. Delinquencies are not only rising from month to month, but rising at a faster pace. More than 41 percent of subprime mortgages are delinquent.
— About 1.2 million loans out there are in limbo: The borrower is in serious default yet the bank has not started the foreclosure process. Another 1.5 million are in early stages of the foreclosure process but the bank hasn’t yet taken possession of the home. Counting these and loans that are highly likely to end up in default, one analyst estimates three million to four million foreclosed homes will come on the market over the next few years.

To read more, click on the below link:
http://reason.com/blog/2009/09/23/corpse-of-a-thousand-houses

Now let’s take a look at some data that reflects the consumer debt in America:

— Here are some interesting statistics from an article titled, “Don’t Get Clobbered By Credit Cards”, by author and journalist, Gary Weiss:

— The average American household’s credit card debt in 1990 was $2,966. In 2007 it was $9,840.

— 60% of U.S. consumers always (or usually) pay off their bills in full each month. The 40% who don’t pay off their bills each month are called “revolvers”. In 2007, revolvers paid $18.1 billion in penalty fees to credit card companies. This figure is up more than 50% since 2003 and accounts for approximately half of the industry’s $40.7 billion in profits. For the full article, please click here. 
(SOURCE: http://www.parade.com and garyweiss.blogspot.com)

 
So, credit card debt has more than tripled in less than 20 years and “revolvers” paid $18.1 billion in penalty fees! That is astounding!

There are many resources available to help get you reduce and eliminate your debt. Make sure you do your homework because some may be causing damage to your credit along the way.

Here are some that I heard are worth looking into:
www.cashflowobjectives.com
www.mortgageaccelerator101.com

Do you know any others that you would recommend?

Do you have any questions?

Jose Luna
HomTur Video Realty
1720 Wazee St Unit 1-B
Denver, CO.  80202
(303) 815-1515
www.JoeMoonSellsColorado.com 

[Jose Luna is the managing broker of HomTur Realty, and manager of ColoradoNewHomes.com. Jose is also a member of the Denver Board of Realtors. He specializes in residential and investment properties. He is an investor, landlord, and has managed his properties for over nine years. Jose is a University of Colorado alumnus where he earned his Mechanical Engineering Degree. Jose is committed to living his by his life’s mission statement: “To use my passion and enthusiasm to inspire and empower others to create powerful lives.”]