10 Expensive Mortgage Mistakes

Most advice columns tell you how you should do things. But there are all kinds of things you shouldn't do, either. Here are 10 frequent financial mistakes that consumers routinely make -- and you should avoid.

Don't Choose the Wrong Mortgage: Home loans are no longer the lifetime obligations they used to be. Still, you don't want to be saddled for even a short period of time with the wrong one. Investigate all your options, then lay your choices side-by-side and do the math, making sure to compare worst-case scenarios. Be sure to look at initial interest rates, future interest rates and payments (if different), and the possibility of prepayment penalties.

Confuse "Pre-Approved" and "Pre-Qualified" with a Loan Commitment: According to one school of thought, however, when you are "pre-qualified," the lender is making an educated guess about how much you can borrow based on information you've provided. When you are "pre-approved," the lender has verified everything you have told him or her and is offering to lend you up to a given amount at current interest rates -- under certain conditions. Whether pre-qualified or pre-approved, final clearance and a check at closing -- a loan commitment -- are subject to an appraisal satisfactory to the lender, good title, a last-minute credit check, and other verifications. When meeting with lenders, always ask how they define each term and what additional steps will be required to obtain a loan.

Have Too Much Credit: Excessive credit is almost as bad as no credit or even bad credit. Even if you pay your bills on time, lenders tend to focus just as much on how much credit you have available to you as they do on timeliness. So being up to your ears in car loans and credit cards is a sure way to be turned down for a mortgage. Postpone any big ticket purchases until after you buy your house.

Lie on Your Loan Application: Exaggerating your income on a mortgage application or putting down other untruths can be a federal offense. Lenders rarely prosecute liars. But if they find out later, they can call your loan due and payable. Don't ever sign your name to a loan application that is not completely filled out, either. Loan officers have been known to stretch the truth to get a client approved, but it's the borrower who ends up paying the price, often in the form of monthly loan payments he can't afford.

Hide If You Can't Make Your Payments: The worst thing you can do is ignore phone calls and letters from your lender when you are behind on your payments. Lenders have many options at their disposal to help keep borrowers from losing their homes to foreclosure. But they can't do anything for you unless they can talk to you about your difficulties. Lenders are the enemy only if you give them no other choice.

Skip a Home Inspection: Failing to make your purchase contingent on a satisfactory home inspection could be a costly mistake. Independent home inspectors examine houses from stem to stern. They'll be able to tell you whether the roof and/or basement leaks, whether the mechanical systems are in good shape and how long the appliances should last. They can't report on things they can't see, but at least their trained eyes are better than yours. So don't pass just to save $300-$400; that's money well spent.

Hire Just Any Agent to Sell Your House: All real estate agents are not the same. You want to look for those who specialize in your neighborhood and are top producers. Ask your candidates how they plan to market your house, what you can do to make the place more attractive to prospects and how much you should ask. If you don't like any of the answers, looks elsewhere. And above all, stay away from relatives. Unless Aunt Bessie or Nephew Nick fit the description above, keep looking.

Fail to Check Out a Remodeler: Never, ever hire a contractor who knocks on your door or says his prices are good for only a few days. Reputable remodelers don't solicit door-to-door, and they don't cut prices just because they happen to be in your neighborhood. Check out a potential contractor thoroughly by calling several of his past clients, your local better business bureau, his bankers and suppliers, and your local consumer affairs agency.

Pay Too Much Upfront: If a contractor asks for more than a third of the contract price as a down payment, chances are something's wrong. At worst, he's a scam artist who has no intention of returning after he cashes your check. At best, he's undercapitalized and can't afford to purchase materials on his own. Or, in between, he could be using your money to pay workers on another job. Never give a contractor cash, either.

Burn Your Mortgage: It's a wonderful feeling when you make your last house payment. After all, the place is now yours, all yours. Many people celebrate by holding a mortgage burning party. But they torch the original document. Don't. Make a copy and burn that instead. Keep all your loan docs in a safe place.

Roundabouts

The largest myth:
Is the roundabout like a 4-way stop?

Not really. The main similarity is that both roundabouts and 4-way stop intersections do not have signals. The differences include: 4-way stops yield to the right, roundabouts yield to the left --like a right turn on red-- because the circulating traffic comes from that direction. At 4-way stops, each direction gets a turn in order. At roundabouts, each driver chooses a safe gap to enter and no driver “gets a turn.”

For more frequently asked questions and Animations:
http://www.alaskaroundabouts.com/Dowling/index.htm

Auto Accident Reporting Checklist

If you have ever been in a car accident, the feeling of your heart racing and your adrenaline pumping, it is difficult to think clearly about the event and the things you need to do immediately following an accident. It is very important to document thoroughly to ensure that the claims process is handled as quickly and smoothly as possible. Even if there is police involved, the accident report filled by the policy officer may take days and may not have all the necessary information. We have a check sheet available to pick, or mail that will conveniently fit in your glove box.

Basic Information
Date
Time
Location
Weather conditions
Your Driving Speed
Road Speed Limit
Travel direction

Other Driver’s Basic Information
*Make certain the driver is the vehicle’s registered owner.
Name
Address
Home, Work and Cell number
Drivers license number
Make, Model, Year of car
License plate number
Vin Number (vehicle identification number)
Business card
Email

Other Drivers Insurance Information
*exchange of ID card make this step easy
Insurance company name
Address
Phone Number
Policy Number

Passenger or Witness Information
Name Address
Home, Work and Cell number
Plate number if applicable

Police and Emergency Personnel
Division (example Fairbanks, Anchorage, Alaska State Trooper)
Name
Badge Number
Phone number

Don’t Forget to…
Write a description of any damage on your car
Take photos of car’s damage, and placement of vehicles (cell phones or digital camera). Perhaps take far away photos of the vehicle's and skid marks. Then take close photos of the license plates and vin numbers to have these to refer to.

If the police is involved they will provide a Alaska Motor Vehicle Crash Form 12-209. This form should be filled out when involved in any auto accident. If there were no police to assist in the accident the form can be found online (link below) or at any law enforcement post. The state requires this report only over a certain dollar amount, however if one party involved fills one out and one does not, the one that failed to fill will automatically get their license suspended. To prevent this frustrating and time consuming issue from occurring it is advisable to fill one out, maintain a copy and follow up by calling the DMV in Juneau at 907.465.4361 and confirm the information was complete and properly logged. If the accident was minor and is apparent the other party is at fault, they were sited by the police for example for failure to yield, and their Insurance is active, we recommend contacting us during business hours for us to document in your file and give advice. We will not file a claim unless there is a chance the other party’s Insurance has lapsed or the other Insurance company attempts to place blame on your behalf. Calling during business hours is considered reporting to your Insurance provider but without filling an actual claim it prevents loss of possible benefits or rewards to your account. Even filling a claim for a not at fault accident can cause a loss of a discount or accident forgives reward.
http://www.muni.org/iceimages/APD1/crash209.pdf

Great money saving Tips for Insurance

Have you been carrying the same coverage amounts you've had for years? We can help, evaluate whether it's to your benefit to change them to reflect your current situation.
We may also be able to help save money with our discounts. Are you a safe driver? Does your teenager have good grades? The answers to these questions and others may save you money. Are your coverage limits outdated? Alaska requires we buy a certain minimum (50/100) but that's not enough for people with assets to protect. The policy should be large enough to cover the value of your home, investments, and some of your future earning power, so a big court judgment wouldn't end up crimping you for lifestyle.
Do you have occupational discount? Many jobs now offer up to 15% savings! What about short annual mileage? If one of your vehicles is driven less than 7,000 miles a day that will save $!
What about your coverage? Is your car 10 plus years old and worth less than $7,000 and the Insurance is $800 a year? making some adjustments will save $400 a year, just ask how.
Safe driver discount is up to an additional 20% to qualify would mean you've had continuous standard auto liability Insurance for the past three years (or more) with no accidents and no chargeable violations during this time.
Defensive driver discount, over 55 of age and a completed accident prevention course will save 5%.
Resident student discount and Good student discount are available for teen drivers under the age of 24, savings up to 30%.
Accident forgiveness is the insulation against your rates going up for having an accident. Not available with almost every company unless with the carrier for a minimum of five years, and we offer in our Gold and Platinum day one!
Deductible rewards reduces your deductible the day you sign up by $100 and an additional $100 ever year the policy goes accident free! (savings up to $500)
Safe Driving bonus is 5% reduction in your Insurance every six months the policy goes accident free! (Platinum) Wouldn't it be great to know your rates will go down every six months?
Sign up for auto draft and lock in the good payer discount 4%
Multiple policy discount 5-10% savings on each policy! The more policies with a carrier the more power a customer has.

Moose Accidents Rise

There were 236 Moose accidents reported to the Alaska State Troopers in 2006 including 2 fatalities. The average cost per Accident is $8355.92. The highest risk months are August and September when the cow comes into her breeding cycle, when the game of catch me if you can is well under way. With the large amount of movement comes the chance of finding moose on roadways where not commonly found. Statistics have increased year to year from 1996 with a total of 84 to last years staggering 236. Consider Comprehensive coverage. Usually very inexpensive and covers a broad number of perils including animals or moose. Commonly when a car reaches 10 years of age it is not worth keeping "full" coverage. There is an alternative, a middle of the road coverage, remove Collision only and keep the comprehensive for a minimal cost. Other covered items would be glass, falling object, theft, vandalism, fire, wind and hail. Call for more information.

Wildfire Risk

We are using stricter policies for inspecting wildfire risk before issuing new or renewed Homeowners Insurance.

Under the new standards, which took effect May 21, inspectors in Alaska will start measuring flammable vegetation around a home, examining fire protection and water sources in an area and requiring that certain flammable items, like wood piles, be moved away from insured structures.

We have inspected structures itself in the past, but this is the first time we are kind of turning our back to the structure and looking at the surrounding area.

The move is part of nationwide changes to increase inspection standards based on specific regional threats, like hurricanes in the Gulf coast, earthquakes in California and wildfires in the Pacific Northwest and Alaska.

Homeowners that cannot or will not remedy the situation will be denied coverage.
This is not a situation where we are actively looking to go and deny people Insurance, we are looking to better minimize our exposure. At the same time, it helps people take steps to mitigate and protect themselves from wildfire exposure.

The new standards are not unique to just Alaska. This program began in California almost a decade ago, and has similar programs in Arizona, Idaho, Washington and Oregon.

Starting in 2000, a database was developed of wildfire activity in Alaska to help answer an increasing number of public inquiries about the likelihood and nature of fires in given areas around the state. According to those figures, a 2004 wildfire northeast of Fairbanks that burned almost 540,000 acres damaged 52 structures including 16 homes and 12 businesses, while a fire last summer along the Parks Highway that burned more than 130,000 acres damaged three homes and 14 outbuildings.

By comparison, a Georgia wildfire last month that burned 20,000 acres forced more than 1,000 people to evacuate the area and destroyed 13 homes, and a recent wildfire in Florida burned around 120,000 acres and forced 730 families to evacuate their homes.

Criteria being used:

1. Homes must have a 100-200 foot clearance dependant on the Fuel Hazard Rating (Low is sparse brush under two feet tall, Medium is under two feet tall brush or over two feet with little or no dead brush or trees, High is brush over two feet tall with large amounts of dead material)

2. Homes with wood shingles/shake would need to replace roof material prior to renewal or new business.

3. Homes can not be within 100 feet of a home with wood shingles/shake type roofing material.

Firewood must be stacked a minimum of 30 feet from the home. Firewood stacked under decks, eaves, canopies, overhangs etc are unacceptable.

4. Home must have access road/driveway with 16 foot or greater clearance.

So if building a home is your summer project, please ensure that the material for your roof is metal or composit rather than wood. Wood is typically costly and rarely used in Alaska so this is of little concern. Add to your summer projects to remove any fire wood piles near your home.

Here are some useful websites:

Division of Forestry: http://www.dnr.state.ak.us/forestry/fire/current.htm

NASA's Visible Earth: http://visibleearth.nasa.gov/view_rec.php?id=6937

Alaska's Smokejumpers: http://www.alaskasmokejumpers.com/

NOAA: http://www.ncdc.noaa.gov/oa/climate/research/2004/fire04.html

US Fish and Wildlife Service: http://www.fws.gov/fire/program_statistics/2004/wf_alaska.shtml

"Why do I need Insurance, I'm just renting?"

You may not own the building, but tenants have just as much at risk in the event of a loss. Most people do not realize that their Landlord’s Insurance will not cover to relocate a tenant, or reimburse for any damage to a tenant’s property.
Ask yourself:
What if there was a fire in the building?
Where will I live?
How much will it cost to replace all my belongings?

Protecting yourself is more affordable than most people realize.
For as little as $1.50 per week we can help protect you against:
Fire
Theft
Vandalism
Water Damage*
Liability
…and more!

Having renters Insurance can also provide a 5% discount on Auto Insurance.

For more details http://realestate.msn.com/rentals/insurance.aspx

Please call or come see us for more details. Also if you have rental property we can organize some information for your tenants or give advice on how to offer this coverage.

Flood Insurance?

When your home is flooded, it can lead to financial ruin if you don't have the proper insurance. And note this: A basic homeowners policy won't cover your flood damage! You need flood Insurance — a special policy backed by the federal government, with cooperation from local communities and private Insurance companies.
Most Americans neglect to purchase protection. Only about one-quarter of the homes in areas most vulnerable are insured against flood loss, according to the Federal Insurance Administration (FIA). In those areas, flooding is 26 times more likely to occur than a fire during the course of a typical 30-year mortgage. That means that you're six times more likely to be damaged by a flood than a fire.

Flood Insurance in general does not take effect until 30 days after you purchase of the policy So, if the weather forecast announces a flood alert for your area and you run to purchase coverage, it's already too late. You will not be insured if you buy a policy a few days before a flood.

Outside of fire, flooding is the most widespread natural disaster. Floods are caused by storms, melting snow, hurricanes, and water backup due to inadequate or overloaded drainage systems, dam or levee failure, etc. According to the NFIP, two adjacent properties have to be under water to call the situation a flood. In a rural area, at least 2 acres must be submerged.

Preferred risk policy: Low-rate flood insurance policy (available for just over $100 a year) for people living in flood zones of minimal and moderate risk (zones B, C, and X).

Special Flood Hazard Area: The most hazardous flood zones are V (usually first-row, beach-front properties) and Zone A (usually, but not always, properties near water). A being the most common in Alaska near lakes, streams, sloughs, and even dry slough beds.

To find out which zone applies to you. You can go to your town hall or city hall, where employees responsible for issuing building permits in your area have access to flood zone maps. Or obtain any Elevation Certificates that have been performed or hire a certified Engineer.

A zones - are subject to rising waters and are usually near a lake, river, stream or other body of water. Flood insurance is mandatory in all A zones, where premiums can be about $595 to $3,000 annually because of the high potential of flooding.
X zones -These are minimal-risk areas where flood insurance is not mandatory. Homeowners in X zones (which are labeled B and C zones on older maps) pay as little as $306 annually. In certain cases, property owners may qualify for the $100-a-year preferred risk policy.

Strict exclusions of coverage apply in any basement. A basement is defined as any area that is below grade on all four sides. In some cases, sunken living rooms can be defined as a basement. Building coverage in basements is limited to systems that service the building, such as electrical boxes, heat pumps and air conditioners. Contents in basements are not covered with a few exceptions such as washer, dryer, freezer and the food in it.

Please call or email for further information or pricing.

Diagrams of lowest flood guild
http://ublib.buffalo.edu/libraries/e-resources/ebooks/records/eeh6024.html

Listings of Communities Participating in NFIP:
http://www.fema.gov/cis/AK.pdf

Examples of an Elevation Certificate
http://www.fema.gov/business/nfip/elvinst.shtm

or

http://www.fema.gov/doc/nfip/elevcert_template.dot

Chip Repairs

We all have experianced the sudden rock chip that sends our heart racing! We are one of the few companies that still offer repairs at no cost! Yes we waive the deductible on Comp if it can be repaired! It is easy, call 1800-626-4527 with your policy number and the network will issue a P.O. number and pay to repair up to four chips each occurance. Again we are making certain the things that matter most are our priority!

Tips for Buying Earthquake Insurance

We live in a quake-prone region, the best way to protect your investment in your home is to buy Earthquake Insurance.

The decision whether or not to buy EQ Insurance is an individual, financial decision. Key factors to research and consider are:

A. pricing
B. the amount of equity you have in your home,
C your proximity to a fault zone
D the age and style of construction of your home and foundation.

Policies with 10% to 15% deductible are now available. Deductible is subtracted off the settlement amount rather than out of pocket. The price and high deductibles for EQ policies has led many people to avoid buying the product, but remember; If you live in a quake-prone region, going "bare" with no insurance means you have a 100% deductible…you'll bear the entire risk yourself.

Don't assume that FEMA, the SBA and/or private charities will bail you out with funds to rebuild after a major disaster. FEMA has very limited funds and strict eligibility criteria. SBA loans are modest and must be repaid. Private charities are being severely stretched by an ever-increasing demand for their services.
Coverage’s to consider

A. contents
B. replacement
C. building code
D. additional living expenses

For current earthquake Activity click here:
http://www.aeic.alaska.edu/Seis/recenteqs/

Accident Awareness

Being able to respond when an accident does happen, can be just as important as avoiding one. The first step we always recommend, is obtaining an accident report. An accident report may be required by the state of Alaska under the following conditions:

1) Someone is injured
2) Someone is killed
3) The damage to the vehicle(s) involved appears to be $2000 or more

Accident reports, if required, need to be submitted within 10 days of the accident. If a police officer responds to the scene of the accident, he or she should be able to provide the proper form. The form is also available at any police station, as well as online at:
http://www.dot.state.ak.us/stwdplng/accreptapp/index.shtml

O.O.P.S. !

Many of us have been fortunate enough to avoid the claim process. So what happens when an accident does occur? Let "O.O.P.S." lend a hand.......

Obtain insurance information - from all parties involved.
Obtain an accident report - available at any police station.
Phone your agent - we are here to help!
Seek an estimate - lining up a body shop can help the claims process along.