What Factors Affect Your Car Insurance Rates?

If you own or lease a car in most states it is mandatory that all drivers have car insurance. Depending on the type of car and type of ownership car insurance rates can become very expensive, especially in California. Knowing this, one way to get cheap California auto insurance is to know at least some of the factors that affect your rates so that wiser decisions can be made in choosing the car to drive and choosing insurance coverage.

One of the main factors affecting a car insurance rate is your driving record. If you have the misfortune of being in accidents, especially of a severe nature, it is almost guaranteed that your rates will be high. The insurance companies view a driving record as a report on possible liability. The more liability the more risk a company has to take to insure a driver with a blemished driving record. The best advice for improving your driving record is to take the necessary classes authorized by a local motor vehicle administration and become diligent about improving your driving habits. Don’t speed, don’t drive intoxicated and don’t participate in any activities that will cause points to be added to your record. If you follow these tips eventually your driving record will improve and one day you may qualify for more affordable rates and lower premiums.

Another factor affecting car insurance rates is the type of car you drive. People usually only think about what type of car they want and not how much it will cost to insure. It is definitely important to consider the insurance costs on certain vehicles prior to purchase. If you own a luxury vehicle where parts and repair and labor are expensive you should be prepared to pay higher car insurance. The more money an insurance company may have to pay for a possible accident or repair the more money the customer will pay for the car insurance. In addition, cars that have a high level of theft will also require more to insure. This means that a car that is relatively affordable to purchase could cost a lot to insure merely because it’s easy to steal and because ultimately the insurance company will have to pay up. In all, considering the type of car you drive prior to purchase can help reduce insurance rates.

Finally, poor credit affects the cost of car insurance. Many people think this is unfair as they believe that credit has absolutely nothing to do with driving. Many claim that the insurance companies don’t take a risk with bad credit applicants because if you don’t pay your insurance the policy is simply cancelled. Despite these arguments, it is the case that people with poor credit pay more for car insurance like with any other service from purchasing a car or buying a home. If you want to improve your insurance rate it would be very advantageous to thoroughly settle negative debts and then reapply for insurance after your credit rating has improved to get a better rate.

Including the factors listed above; there are many reasons why auto insurance rates vary from person to person. Knowing the reasons for why your rate is not as affordable as you’d like can help you to take the necessary steps to improve your car insurance rates.

Cost of Hiring a Buyer’s Advocate

Buying a home is tedious work as it takes time, research and a lot of paper work. As such, you have two options – do it on your own or get the help of a buyer’s advocate.

The process of buying a home can be done without a hitch if one gets the services of a professional real estate agent. With a trusted professional to assist you, you can be sure to find your dream home or at least one closest to that.

The fee for hiring a real estate agent depends on their expertise, the level of service you want and the extent of the job you need. Other factors that can influence the fee are the condition of the property you want to purchase, budget, search area, specific aspects and level of difficulty.

Full Service

The fee for a full service agent normally ranges from 1.5 percent to 2 percent of the purchase exclusive of the GST. This rate is similar to what seller’s agents charge.

Home buyers can also choose an agent who charges a fixed fee. A fixed fee is already set regardless of the property’s price which can actually save you such as in the event you purchase a property at a higher cost. This fee, however, may be collected in advance depending on the type of service you require.

Specific Service

If you require help only in certain aspect of the home buying process, you can still hire a buyer’s advocate but for a specific service only. As an example, you can get the services of an agent for negotiation only. At an auction, this real estate professional will negotiate the property price on your behalf before, during and after the auction.

The fee for a negotiation only service is usually one percent of the total purchase price plus GST. Or it can be a fixed rate depending on your agreement.

If you want to be represented during auction bidding, the fee starts at $500 for each auction an agent attends. You will have to pay an additional fee on a successful purchase from that auction.

Take note that most real estate professionals would already ask for payment of a portion of their fee during the signing of contract. The initial fee can range from $1,000 to 50 percent of their total fee and is non-refundable. In some instances when the purchase of a property does not push through, the fee can be refunded.

Non-refundable fees are meant to compensate the efforts of a buyer’s advocate in searching for your desired properties or what is called their chargeable time. This should be stated in the contract to make the homebuyer aware before he or she signs the agreement.

Decision By Regulators May Have Big Impact On Mortgage Rates And Products

A decision by government regulators on an obscure issue next month could have a big impact on mortgage rates and home loan products available to borrowers.

Under the Dodd-Frank Act that overhauls regulation of the country’s financial system, mortgage lenders must share losses on their loans. But if their mortgages are deemed safer “qualified residential mortgages” they don’t have to have their skin in the game.

Mortgage products that don’t fall into the qualified residential mortgage category will probably have higher mortgage rates and tougher qualification standards for borrowers.

Congress, which typically doesn’t get into the details of the laws it makes, didn’t define a qualified residential mortgage. Instead, it left it up to regulators, who are now grappling with the issue.

Regulators, expected to reach a decision next month, have been getting an earful from lenders, investors and housing advocates on how to define qualified residential mortgages. Most groups agree to exclude the riskiest mortgage product like negative amortization loans, but beyond that, they disagree on what to call a safe mortgage.

Regulators have a lot to think about. Take down payment amounts, for instance. A recent article by MarketWatch says large banks want a large down payment requirement of 30 or 20 percent. Small banks want a small down payment requirement of about 5 percent, and housing advocates want to allow even smaller down payments of 3 percent.

Credit scores, income to debt ratios, length of employment, and the amount of documentation are some other factors to consider.

Depending on the regulators’ ruling, many mortgage products or just a few will be defined as qualified mortgages and be exempted from risk sharing requirement. Criteria that are too strict will risk barring many borrowers from low mortgage rates, but if guidelines are too loose lenders might be free to again make risky loans.

When the real estate market bubble was building, some mortgage lenders gave risky, exotic home loans to borrowers, then bundled the mortgages into bonds that were sold to investors who took the hit when borrowers defaulted. The theory is that lenders will be more cautious about making riskier loans if they retain part of the risk, or have skin in the game.

In addition to bank regulators, the Treasury Department, the new Financial Stability Oversight Council and the new Consumer Financial Protection Bureau will be involved in creating the rule.