We hope you’re having a great week and that you have plans to go visit a pumpkin patch this weekend.
This week, we’ll look at what your homeowner’s insurance doesn’t cover with trick-or-treaters, look into why mortgage application rates are flat, and suspect that will change because mortgage lenders are easing up the credit score standards.
Flat Mortgage Applications
Reuter’s is reporting that US mortgage applications are near flat as demand decreases. When you dig into the article, their experts state that refinancing is up, but because it’s only 0.3% for the week ending October 11 and that’s down from the 1.3% from the week ending October 4th.
The refinancing index gained 3.3 percent after recently hitting the lowest level since June 2009. In contrast, the gauge of loan requests for home purchases, a leading indicator of home sales, fell 4.8 percent.
Their analysts blamed the instability of the government shutdown for the reason.
Mortgage lenders ease credit score standards
Mortgage Watch, a Wall Street Journal based website, announced that home buyers no longer need perfect credit to obtain a loan. After the housing bubble burst, mortgage lenders increased the requirements for obtaining home loans.
The average credit score among borrowers who received a mortgage in September was 732, down from a peak of 750 a year prior, according to new data released today by Ellie Mae, which provides mortgage lenders with loan origination systems. That’s also the lowest average credit score since the company started tracking this data in August 2011.
To be sure, the bar to getting a mortgage remains high. Applicants who were denied a mortgage in September had an average FICO score of 696, according to Ellie Mae—a score that’s relatively stellar by most counts. FICO scores range from 300 to 850. Before the recession it was common for borrowers with credit scores in the 600 range and below to get mortgages.
Ellie Mae’s data comes from lenders that input mortgage applicants’ information in its software, which processes applications. The data represents 20% to 30% of all mortgage applications in the country.
So if you don’t have perfect credit and are looking at buying a home, find a reputable mortgage broker and review your situation. If you have a home loan and don’t have perfect credit, it will be easier to refinance. Talk to a mortgage broker to find the best plan for your situation.
What Is Your Risk At Halloween?
Fox Business ran an article on what risks are involved on Halloween and what could or might not be covered by your homeowner’s insurance policy.
The risks are:
- Passing Out Candy – Unfortunately, sometimes people slip and fall or somehow get injured on your property. And you are responsible for that. The good news is that your insurance should cover any slips, trips or falls that take place outside your home. Your insurance should also cover your defense if it went to trial.
- Hosting a Haunted House – Any injuries would be covered if it’s free. If you charge to go in, you would be considered running a business and your insurance would not cover it.
- Vandalism and Stolen Objects – While you could file a claim, you would have to decide if it’s really worth it to pursue an insurance claim for stolen decorations, as it may hurt you in the end if a larger issue occurs down the road. If you have a history of a lot of little claims, it may raise your rates or leave you open to being dropped.
As with all things, please talk to your insurance agent specifically about your situation and concerning your own policy.
So, have you started decorating for Halloween yet?