At Stewardship, we hear a lot of great questions from people seeking clarity about finances, insurance, and housing. These questions show us that many people are eager to make smart decisions for their families and futures. So, let’s dive into the most frequently asked questions of 2024 and our advisors’ answers.
What do you think is going to happen with the housing market (or rates)?
The housing market and interest rates have been hot topics this year, and for good reason. Mortgage rates have been higher than they were in the previous few years, but the market is still strong. Why? Because the inventory of available homes remains low. Supply and demand drive the market, and as long as housing supply can’t keep up with demand, prices are unlikely to drop significantly. There is no data that suggest a “crash”.
As for rates, they’re unpredictable. The best advice is to focus on what you can control. If you’re ready to buy a home and can afford the payment, then buy a house. If the uncontrollable and unpredictable rates are not at a level that provides an affordable payment, then don’t buy a house. Remember, you can refinance your mortgage down the road if rates drop, but you can’t rewind time to lock in the perfect house you love.
Why did my auto or home insurance premium go up?
Unfortunately, rising insurance premiums are a reality many are facing in 2024. This increase often has little to do with you personally and more to do with broader trends in the industry.
For auto insurance, the cost to repair vehicles has increased due to things like more expensive technology in cars. For home insurance, premiums have risen because of increased claims from natural disasters, rising labor costs for repairs, and inflation affecting materials. If your premiums went up, it doesn’t mean you’ve done anything wrong—it means the world has gotten more expensive to insure.
How do you get paid as an insurance agent?
We get this question a lot, and we’re glad you asked! As independent insurance agents, we’re paid by the insurance companies when we help you find and secure a policy. This means you don’t pay us directly. What’s even better is that we’re not tied to one insurance company. We work for you, shopping the market to find the best coverage for your unique needs.
What is coinsurance?
Coinsurance is a term often used in health insurance policies, but it can be confusing. In simplest terms, coinsurance is the percentage of costs you pay for a covered service after you’ve met your deductible. For example, if your plan has 80/20 coinsurance, the insurance company covers 80% of the bill, and you’re responsible for the remaining 20%. It’s one of the ways costs are shared between you and the insurer.
Will doctors take my insurance?
This depends on the type of insurance plan you have. Some plans, like PPOs, allow you to see almost any doctor but provide greater benefits if you stay within the network. Other plans, like HMOs, may limit you to a network of providers. The best way to know if a doctor will take your insurance is to check with your provider’s office directly and verify with your insurance company.
What is the difference between a deductible and max out-of-pocket?
Great question! A deductible is the amount you pay out of pocket for covered services before your insurance kicks in. For example, if you have a $1,000 deductible, you’ll pay that amount before your insurance begins covering costs.
The max out-of-pocket is the most you’ll pay in a year for covered services, including your deductible, coinsurance, and copayments. Once you reach this limit, your insurance covers 100% of covered services for the rest of the year.
Is now a good time to buy?
If you’re ready financially and emotionally, then yes! Buy as soon as you can afford it because time in the market is better than trying to time the market. Timing the market is nearly impossible, and waiting for the “perfect” time often leads to missed opportunities. A better question is: Can I afford this home, and does it align with my long-term goals? If the answer is yes, then now is a good time to buy.
Can I keep my house, rent it, and afford a new one?
The answer depends on your financial situation. Renting out your current home can be a smart way to build wealth through real estate, but it’s important to run the numbers. Will the rent cover the mortgage and expenses? Do you have enough savings to manage two properties? The proper answer to this question often requires a sit down with one of our Advisors. The good news is we conduct these consults for free!
Should I wait to buy a home for home prices to come down?
The answer to this is similar that a previous question. Waiting for prices to drop is risky, especially in a market with limited inventory. While it’s possible prices could level off or decrease slightly, there’s no guarantee. Meanwhile, you might miss out on building equity or securing a home that fits your needs. The better approach is to focus on your financial readiness and find a home you’re excited about, rather than trying to time the market.
These questions show that people want to make informed decisions, and we’re here to help. If you have more questions or need personalized advice, don’t hesitate to call, text, or schedule an appointment with us. We would be honored to help you navigate your unique situation and provide clarity for your next steps!
