Understanding the Increase in Homeowners Insurance Premiums

Have you noticed an increase in your homeowner’s insurance premiums lately—maybe significantly? If so, you are not alone. There are a number of factors that impact how high or low insurance premiums are, and there are several currently at play which have contributed to a recent rise for many homeowners.

What Drives the Increase in Homeowners Insurance Premiums?

In general, the two primary factors that impact homeowners insurance: insurance rates and inflation. There are numerous things that affect each of these factors themselves, and each of them influence insurance premiums to varying degrees. Overall, when insurance rates and inflation go up, so do homeowners insurance premiums.

How Are Insurance Rates Factored and How Do They Impact Premiums?

Homeowners insurance rates are largely connected to the frequency and severity of severe weather. This, of course, means that rates often vary from state to state as the kind of severe weather experiences from one place to another can differ considerably. The more serious and recurrent storms and other weather-related events are, the more reinsurance—which is insurance for insurance companies—rises, making it more expensive for insurers to offer insurance. These increased costs are passed onto consumers by way of higher premiums.

What Impact Does Inflation Have on Insurance Premiums?

You’re probably well aware of the recent increase in inflation as it has impacted the cost of all sorts of goods and services, but how does inflation affect insurance premiums? Not only is the overall rate of inflation notably higher than average, but the rate of inflation for building labor and material costs has spiked even higher, meaning it is more expensive to rebuild homes. Since repairing and rebuilding homes now costs more, insurance companies have to compensate for those increases by upping premiums.

What Does It All Mean?

Insurance premiums are up nearly across the board due to heightened costs for insurance companies resulting from more severe and frequent weather events and increasing inflation. That said, these factors are not going to rise at the same rate nationwide, so the level at which you experience an increase largely varies on where your home is located. The bottom line is homeowners insurance premiums must go up in order to ensure you are fully protected and covered in the case of a total loss. While it can be frustrating to experience higher insurance rates, it is a small price to pay in the grand scheme of things should something happen to your home; it is better to be safe than sorry.

If you are interested in buying a new home or refinancing your current home, contact one of our experienced Loan Officers today to learn more about your mortgage options.

How to Choose a Home That Will Appreciate

The potential for appreciation is an important factor to consider when choosing a home to purchase. Appreciation is when the value of your home increases over time. There are many factors that contribute to home value appreciation; some of them are out of your control, but there are some that you can control or predict the impact of to a certain extent. Here are some things to think about when choosing a home that may lead to better outcomes with regards to appreciation.

Find a Valuable Property

The value of the land your home sits on certainly plays a role in determining its value. The appreciation of land is generally influenced by fewer factors than that of the buildings housed on it, so going with a home that is on a valuable piece of land can help ensure its value will remain consistent or, ideally, rise regardless of the state of the structure on it.

Location, Location, Location

This old saying hasn’t become a staple of real estate for no reason; location really does play a massive role in the desirability and, by extension, value of a home. This is particularly important to consider when selecting a home to buy because while you can change a lot about the home, you simply cannot change its location. Of course, it can be hard to nail down what exactly makes a location great. There are a whole host of factors, but some of the more notable ones are the proximity to desirable features (parks, shopping, restaurants, etc.), the quality of the school district, a quick (or at least reasonable) commute to a city, and if it is considered an “up and coming” neighborhood. You may also want to look at real estate market trends for this area to get a feel for how values have changed over time historically.

Consider a “Fixer-Upper”

If there is room for improvement in a home, the current value is often lower than it could be. So purchasing what’s considered to be a “fixer-upper” and making necessary and desirable renovations is likely to lead to a higher value and therefore a higher price tag when the time comes for you to sell. While home improvement projects aren’t cheap, another bonus is that you may be able to spend less only making the renovations you find the highest priority compared to purchasing an already-renovated state of the art home—and you may be able to secure a property in a better location and on a more valuable plot than you’d be able to if the home wasn’t in need of repairs.

Be Smart About Upgrades

When it comes to renovations and making updates to your home, you should aim to be strategic in determining what work to have done. Certain renovations are pricier than others and some are more valuable in others in terms of how they can contribute to your home’s appreciation. A few common renovations that are generally known to increase your home’s value the most include garage door replacement, kitchen remodeling, siding replacement, and window replacements.

If you are thinking about buying a new home, reach out to one of our experienced Loan Officers today to learn more about your home loan options.

What to Know Before Buying a Flipped Home

House flipping is when someone buys a home, usually for “cheap,” with the express purpose of remodeling to increase its value and sell it for a profit. As shown by the nearly countless television shows made about flipping, the final result can be very impressive, but is buying and living in a home that has been flipped right for you? Read on for things you should consider before purchasing a flipped property.


Flipped homes often utilize the trendiest design styles and come with brand new appliances. In many cases, you get the charming exterior of an older or historic home with all the comforts of modern décor and technology. As a result, most of these homes are move-in ready and there should be little to no renovation work required on your part.


While there are some risks associated with any home purchase, the risk can be greater with flipped property. The home may look great, but it’s important to make sure it’s not just smoke and mirrors. In some cases, the person doing the flipping does a good job of simply covering up and concealing issues cosmetically without really fixing the problem. When a flipper is experiencing financial and time crunches, they may be more careless even with things that are important, like electric and plumbing work. Cutting corners like this could not only cause you headaches after move-in but can even be dangerous. This can also lead to issues of compliance, and it is essential you make sure all the proper permits were obtained and that your home is up to code. Otherwise, you may end up on the hook for a lot of money and work to get the home in regulatory order.

Things to Look Out For

There are certain things you can do to identify whether a home is flipped. A good indication that it was flipped will be through the property’s history which you can view formally through the county assessor’s office records or informally through most popular online real estate listing sites. Both options give you information about the home’s sale history, and if it was bought within the last year or so, odds are it has probably been flipped.

Once you’re touring the home, whether you suspect already it is a flip or not, there are some hints that could suggest it’s a flip (of course, if it’s a good flip, many of these things will be harder to spot or non-issues). Look out for flaws in flooring. If you spot anything painted that wouldn’t normally be painted, it may be covering up other flaws. Speaking of painting, if there are paint spots where there shouldn’t be or walls look sloppy, it can be a red flag; if they’re willing to be careless with something as simple as painting, what else were they careless with? Check out cabinets, drawers, and doors to make sure they are functioning and don’t hit anything when opened. Just be on the look out for overall poor workmanship.

Ultimately, your best bet to protect yourself from buying a poorly flipped home is to seek out a competent, experienced home inspector. They will know what to look for and will be able to spot red flags that may not be obvious to the average person. You should do this regardless of whether the home is flipped or not; you never know what issues could be hiding below the surface, and an inspector is your best chance at uncovering any problems before committing to a purchase.

Are you thinking about buying a home? Contact one of our Loan Officers today to discuss your mortgage options!

Connect With Us