# How to Find a House and Mortgage
Meet Jason. Jason is looking to get a mortgage so she can buy a house in the suburbs. Luckily, Jason has watched our video “Mortgages 101”, so she feels confident in her ability to understand mortgages. However, she has no idea what to do beyond this point. What should she do? Well, her first step is simple: get a pre-approval for a mortgage. This is a letter, sometimes called a Good Faith Estimate or GFE, that is written by a lender on your behalf stating you have been pre-approved for a certain loan amount. As you can imagine, these are quite useful for determining what homes you can actually afford, plus they’re a requirement to work with many real estate agents.
However, they do have two caveats: One: Most pre-approvals letter will expire within 90 days. Two: Pre-approvals are not mortgage guarantees. Any significant changes to your credit score or debt levels during the home-buying process could jeopardize your loan. So how does one actually get a pre-approval letter? Well, Jason can either use our recommended website or query her personal network to find several well-regarded lenders in her area. Then, once Jason finds them, she should fill out their pre-approval applications, ideally within 14 days to avoid hurting her credit score.
Then, once Jason has compared all her pre-approval letters and chosen the best one, she can finally start looking for a home. To start this process, we highly recommend Jason find a real estate agent. Good agents are well versed in local listings, laws, and regulations, and will have connections with the inspectors, appraisers, and lenders that Jason may need, especially if she doesn’t already have a pre-approval letter. So how can Jason find an agent? Well, she can either search online, query her personal network, or work through our preferred real estate agency.
Unlike most agents, who are paid a small percentage of the home’s final sale price by the seller, the agents from this site are salaried and paid a bonus based on your satisfaction. This means they’re incentivized to produce the best possible experience for you, not rush you into a home. In either case, once Jason has found her agent, she’s finally ready to start looking for actual homes! To find them, Jason can either ask her agent, query her personal network, search the internet, or use our recommended website, which makes this process extremely easy. Then, once Jason finds a home she might consider buying, she just has to follow this three step plan:
Step 1: Tour the neighborhood the home is in. That way, you’ll be able to get a feel for everything from the area’s schools to its crime rates.
Step 2: If you like the neighborhood, stop by an open house. Open houses give people the chance to view a home in person without an agent, and they’re generally between 10am and 4pm on weekends.
Step 3: If you like what you see and want to see the home in detail, schedule a tour of the house. At this point, you’ll need to bring your own agent, who likely will require you to get a pre-approval if you haven’t gotten one already. Hopefully you and Jason now have a better understanding of how to get a mortgage and a home. Be sure to check out our next video, where you’ll learn more about how to get homeowners insurance, and be sure to check out our website, where you can find great real estate agents, mortgages, and more educational content.
#Homeowners Insurance 101
Meet Jason. Jason is in the process of buying a house in the suburbs. Jason has just watched our videos: “Mortgages 101” and “How to Find a House and a Mortgage”, so she knows exactly how to get a great home with great financing. However, she still has no idea how to get homeowners insurance. What should she do? Well, her first step is simple: before she can buy homeowners insurance, she’ll need to understand it. So let’s start there. Like most types of insurance, homeowners insurance reduces the costs associated with a risk, in this case the risk of your home being damaged or someone being injured on your property, in return for a monthly fee called a premium, which is based on everything from your home’s age to its location.
As for homeowners insurance actually works, it operates through six coverages bundled together, none which are required by law, though they will be required by your mortgage lender. The first coverage is dwelling coverage, and protects the structure of the home from theft and pretty much every disaster you can think of, except floods and earthquakes, whose plans need to be purchased separately. So how does it work? Well, in general dwelling coverage works through a deductible and limit. A deductible is simply the amount of money Jason must pay per incident before her insurer pays the rest, while a limit is the maximum amount an insurer will pay.
For example, let’s say Jason’s insurance plan has a $5,000 deductible and her house recently suffered a fire that caused $100,000 in damage. Under the terms of her policy, Jason only has to pay the first $5,000 of his bill; her insurer will cover the rest up to her limit, say $500,000. So that’s dwelling coverage works. The next three coverages also work through a limit, typically as a percentage of the dwelling coverage. Let’s go through each one: One: Other structures on your property coverage, which covers things like outhouses and detached garages. Two: Personal property coverage, which covers the cost of replacing the contents of your home.
And Three: Loss of use coverage, which covers any expenses you incur while your home is uninhabitable, such as staying in a hotel. Finally, the last two coverages operate a little differently: their limits are standalone, independent from the dwelling coverage. Again, let’s go through each. One: Personal liability coverage, which protects you against lawsuits filed by those injured on your property. And Two: Medical payments coverage, which covers the medical expenses of those injured on your property who don’t sue you. Hopefully, you and Jason now have a better understanding of how homeowners insurance works. Be sure to check our our next video to learn how to actually get homeowners insurance, and to check out our website, where you can find more educational material and great homeowners insurance recommendations.