Knowing if your Tri-County NJ home is adequately insured from peril or not is more difficult than it used to be.

According to a study released by the Consumer Federation of America (CFA), insurance companies are cutting coverage and paying fewer benefits for damage due to hurricanes, tornadoes, floods and other natural disasters.

The CFA report says that Tri-County NJ homes have seen an increase in premiums and a decrease in coverage. Homeowners are exposed to higher disaster payouts because they have less money available to help themselves.

Tri-County NJ Home Insurance Going Up?

As if rates weren't already high enough, 11 states have recently received requests for homeowners' insurance rate increases of 18 percent or more. It is expected that insurance commissioners will block many of these pending rate increases because of the financial burden it will place on homeowners. Many homeowners are already coping with severe financial difficulties in this bad economy.

The study concludes that the insurance industry has shifted from a calculated risk-taker to a risk-avoider. Not only have insurers insulated themselves from their historic share of hurricane risk, they have made no serious effort to cover risks associated with floods or terrorism, which are entirely backed by federal taxpayers.

Spring storms have already wrecked havoc on many areas not normally prone to major natural disasters. As if things weren't bad enough, the Atlantic hurricane season begins June 1st. 2011 was one of the most expensive years in history for insurance claims, and this year is on track to match or exceed 2011.

Now would be a good time to check and see if your Tri-County NJ home is adequately covered in the event of natural disaster. Remember, homeowner insurance policies do not cover flood damage. You will need a separate flood insurance policy to cover damage from flooding. Talk to your insurance agent to see exactly what you are covered for, and what you may need to add to make sure your Tri-County NJ home is protected the way you think it should be.

Does renting a Tri-County NJ home really make sense? Your option of buying a Tri-County NJ home versus renting, with home prices being low, plus some of the lowest mortgage rates in 30 years, makes owning a Tri-County NJ home more like a savings account…

If you'd like to find out if buying a Tri-County NJ home versus renting one makes more sense for you and your budget, contact us for a free, no obligation consultation.

The Tri-County NJ housing market bottom is not going to be a date on the calendar. More likely, the market's bottom represents a series of events that set up the Tri-County NJ housing market for recovery.

What Has to Happen to the Tri-County NJ Housing Market First

According to Stan Humpries, chief economist at real estate website Zillow, "The market bottom is a multi-step affair. First, home sales have to bottom out, which they did in early 2009. Then, long-horizon buyers such as investors, 2nd home buyers, and retirees move into the market."

Even though the Tri-County NJ housing market has seen some decent sales activity this buying season, economists still predict home prices to decline a bit more on the whole, mostly because a big chunk of sales in coming months will be distressed properties.

Humphries points out that "A big part of it goes back to figuring out the 'bottom of the housing market' and the annoying little fact that no one can really predict when it will occur. For obvious reasons, consumers tend to not want to fork over thousands of dollars for something they know will decline in value, even if it's only in the near term."

Humphries goes on to say, "…for those who continue to wait out 'the bottom of the housing market,' lower prices aren't their biggest enemy, the specter of rising interest rates are.

With rates hovering at historic lows, there's really only one direction they can go and a higher interest rate can cost consumers a lot more over the long term than if they wait for home prices to drop a few thousand dollars more.

Don't Try to Time the Tri-County NJ Housing Market

Every time Tri-County NJ housing cycles and buyers try to wait for the bottom, they invariably miss it while thinking they can figure out where the bottom is, and a combination of rising home prices and higher interest rates add up to cost buyers a lot more than if they had taken advantage of prime buying times, which we seem to be in right now.

Humphries sees 2012 as an inflection point for the housing market, albeit on a super local level.

For Tri-County NJ borrowers refinancing mortgages in the fourth quarter of 2011, fixed-rate loans accounted for more than 95 percent of refinanced loans.

Refinancing Tri-County NJ borrowers clearly preferred fixed-rate loans, regardless of whether their original loan was an adjustable-rate mortgage (ARM) or a fixed-rate. This news was based on Freddie Mac's Quarterly Product Transition Report released recently.

Frank Nothaft, Freddie Mac's chief economist says, "Fixed mortgage rates averaged 4.00 percent for 30-year loans and 3.30 percent for 15-year product during the fourth quarter in Freddie Mac's Primary Mortgage Market Survey, well below long-term averages."

The Bureau of Economic Analysis has estimated the average coupon on single-family loans was about 5.2 percent during the fourth quarter of 2011.

An increasing share of refinancing Tri-County NJ borrowers chose to shorten their loan terms during the fourth quarter. Of borrowers who paid off a 30-year fixed-rate loan, 43 percent chose a 15- or 20-year loan, the highest such share since the first quarter of 2003.

Fifty-eight percent of Tri-County NJ borrowers who had a hybrid ARM transitioned to a fixed-rate loan during the fourth quarter, while the remaining 42 percent chose to refinance into the same type of product.

Tri-County NJ Borrowers Can Gain More Savings

Nothaft further commented, "For borrowers motivated to refinance by low fixed-rates, they could obtain even lower rates by shortening their term. Compared to a 30-year fixed-rate mortgage, the interest rate on 15-year fixed was about 0.7 percentage points lower during the fourth quarter. And for borrowers who plan to remain in their current home for only a few years, the hybrid ARM allows for even a greater interest-rate savings. The initial interest rate on a 5/1 hybrid ARM was about 1.1 percentage points lower than on a 30-year fixed-rate loan."

Thinking of selling your Tri-County NJ home? The first big question you must answer is, what is your Tri-County NJ home worth? The best way to determine the current value of your home is by having a comparitive market analysis (CMA) done on your home…

Pricing your Tri-County NJ home properly before putting that "for sale" sign in the yard is critical to your success in selling your home.

Contact us for more information on getting a CMA done for your home.