Why the outrageous flood insurance?

A client of mine wanting to purchase her first home was looking in the Broad Ripple area, and we got her an accepted offer early in September (yay!).  It was disclosed on the listing that the home is in a flood plain, and we knew that the seller paid flood insurance.  They informed us that they paid around $2,000/year. All good! said my client.

We did NOT know, however, that new flood insurance rates would kick in on Oct. 1st due to a new law, the Biggert-Waters Flood Insurance Reform Act. The law, which took effect July 6, 2012, is phasing out subsidies that have kept flood insurance rates low. Why the phase out? The program was left billions of dollars in debt due to several disastrous events.

The law won’t affect anyone who’s had a policy before July 6, 2012, as long as their policy doesn’t lapse. Anyone who has purchased a home in a flood plain since then, however, will now have to pay a much higher premium. Although the law has been in force since July 2012, the rates weren’t available until Oct. 1st of this year, so no one knew the true impact.

But now that Oct. 1st has come and gone, we know how bad it really is. The new flood insurance quotes are so outrageous, it will make it extremely difficult for people in flood plains (i.e. Rocky Ripple and surrounding neighborhoods) to sell their homes.

If a buyer is getting a mortgage, the lender will require flood insurance. If the flood insurance is as high as we’ve been seeing, it could potentially affect the buyer’s debt to income ratio, making them ineligible for the loan.

So, the moment you’ve been waiting for- HOW MUCH are these new rates? My client for one, was quoted around $5600/year by one company, and then settled with a quote from State Farm for roughly $3400/year.  A lender I know had a client quoted at $7200/year.  I wasn’t exaggerating when I said outrageous!

What can be done? The only thing anyone can do as of now is to push congress to change the law. That is what residents in Rocky Ripple are urging others to do. In the meantime, if you’re looking to buy at a home in a flood plain, get your insurance quote before you make an offer.

Check out Indiana Flood Maps.

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Interest rate predictions straight from the lender’s mouth

A few days ago, Indy Scene Team sat down with a mortgage lender, and naturally, drilled him with questions.

We asked one very important question that homebuyers everywhere are wondering: “Where do you see interest rates going in the immediate future?”

Everyone knows that interest rates have slowly but surely inching up the past few months. As of two days ago (Aug. 28th), a 30 year conventional mortgage was at 4.5%, and a 30 year FHA loan was 4.25%. Christie just bought a house at the end of March, and got a 3.75% interest rate on a 30 year conventional!

According to our friend the mortgage lender, the interest rates will likely hit 5% by the end of the year. First quarter of 2014, they may rise a bit more and hover around 5.25%. Will they go down again after that? Only time and the economy will tell. But for now, if you’re on the fence about buying a house, and really want to avoid paying a 5% plus interest rate, now is the time to buy!

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Labor Day Weekend Palooza!

Most people plan out their Labor Day Weekend in advance.  A trip to the lake, perhaps? People over for a cook out? (If you’re Sarahbeth, you go to Jamaica – LUCKY!) Others do the last minute thing. Maybe because they are procrastinators, but if you’re like me, you simply didn’t realize it was already Labor Day (it’s next weekend people!).  So, since I’m not leaving town, and not having people over, what is there to do!?

Worry no more late planners, the 2013 Warm Fest is here! It’s a weekend long event that features the Broad Ripple Music Festival and the Indy Arts & Vintage Marketplace. Check out the amazing line up of bands HERE. It’s not Lollapalooza, but it’s right here in our own back yard, conveniently located in Broad Ripple Park.  And at $40 per day (or $90 for a 3 day pass), it’s very affordable for a music festival.

To purchase tickets and check out the full weekend schedule, visit http://warmfest.org.

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~CS

Don’t let summer pass by without going here!

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Only 4 more home games at Victory Field! Baseball for some is the definition of summer. You can’t let summer go by without cheering on the Indianapolis Indians at least once!

Plus, it’s an inexpensive, family friendly event that is always fun when the sun is out…So go buy yourself some peanuts and crackerjacks and enjoy the summer while it’s still here!

 

If you’re lucky, you may even spot Bill on his Go Green Bike Ad with our sign! Stop and say hi if you do!

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