upfront. Alternatively, many buyers opt to escrow their insurance payments, which means the lender will collect monthly installments and pay the insurance premiums on your behalf. Escrowing can make financial management easier, as it bundles your homeowner’s insurance and property taxes into one monthly payment.
Home Warranties: Peace of Mind for Unexpected Repairs
A home warranty offers additional protection for buyers, covering repair or replacement costs for systems and appliances that break down after the purchase. Whether you’re a first-time buyer or a seasoned homeowner, a home warranty can save you from unexpected expenses. Key Details About Home Warranties: • Cost ranges from $350 to $600 annually, depending on coverage. • Can be negotiated as part of the sale; sellers often include a home warranty as a buyer incentive. • Covers items like HVAC systems, plumbing, electrical work, and major appliances. How It Works If something breaks, you contact the warranty provider, who assigns a service technician to assess and fix the issue. The warranty provider covers the repair costs, minus a small service fee. Be sure to read the fine print, as coverage and exclusions vary between providers.
Appraisals vs. Inspections: Know the Difference
While a home inspection assesses the property’s condition (as discussed in Chapter 5), an appraisal determines its market value. Lenders require appraisals to ensure the property’s value
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