Home Warranty vs Home Insurance—What’s the Difference?

 

Like most homeowners, you have a lot of money invested in your home. But, you also understand that things happen, and protecting your investment and its contents against unforeseeable situations is important. But if you’re shopping for home insurance vs. home warranty policies, the lines between the two might be starting to blur. What are these coverages and how do they differ? Let’s find out.

What Is a Home Warranty?

A home warranty is an agreement between a homeowner and a third-party warranty company that provides coverage for certain items within the home. This policy protects the homeowner’s investment in the event that if a covered item should break or fail, the warranty company will cover most of the repair bill. All the homeowner is responsible for (in most cases) is the service fee, which typically ranges from $50 to $150, and is agreed upon in the contract.

What Does a Home Warranty Cover?

Home warranties cover major appliances and systems that fail due to everyday use. There are typically three types of home warranties available. They include appliance policies, system policies and combination policies. Appliance policies cover items like refrigerators, built-in microwaves, stoves, ovens, dishwashers, washers and dryers and other typical appliances found in a home. Should one of these items fail, the homeowner can file a claim with the warranty company to have a technician respond and repair the appliance. If they’re unable to repair the item, the warranty company may even replace it.

System policies cover items such as electrical systems, plumbing systems and HVAC systems. In some cases, these policies may cover roofing systems, fire alarm systems, central vacuum systems and septic systems as well. If there are issues with these major systems, the homeowner can file a claim and the warranty company will send the proper contractor to repair the problem.

Combination policies act as both appliance and system policies.

If a covered item should fail or break due to typical wear and tear, the warranty company will most likely cover it. Understand that this does sometimes require the homeowner to keep maintenance records to prove that the items aren’t failing due to neglect.

What Doesn’t a Home Warranty Cover?

There are plenty of items or circumstances which a home warranty company will not cover. First, home warranties do not cover structural issues, interior or exterior finishes, furniture or other belongings. Also, should an item covered under warranty break due to neglect, misuse, abuse or an accident, the warranty company will not cover the repair.

It’s important to note that many home warranty companies set limits as to how much a single repair can cost. For example, if the homeowner’s extremely high-end refrigerator fails and requires a repair item that costs $1,200, but the home warranty company set a limit of $1,000 for refrigerator repairs, the homeowner will have to pay the additional cost.

What Is Home Insurance?

Home insurance is an agreement between a homeowner and a third-party insurer that protects the homeowner’s investment against accidents, building failures and natural disasters. These policies even provide some degree of general liability insurance against injuries incurred by other people while on the property.

Any home paid for with a mortgage will be required to carry home insurance by the lien holder (the bank).

What Does Home Insurance Cover?

Home insurance covers much more than a home warranty. There are four types of coverages, including dwelling, other structures, personal property and liability.

Dwelling coverage helps to pay for repairs or losses due to covered events. These events may include fires, storm damage, fallen trees or other unforeseeable events.

Other structure coverage offers the same type of coverage as dwelling coverage with the exception that it’s specifically designed for detached garages, sheds and even guest houses built separately from the home. Personal property coverage helps homeowners recover financial losses to the items within the home or other structures damaged by covered events. So, if there was a plumbing leak that ruined a couch, the insurance company may cover the damage.

Liability insurance protects the homeowner against financial losses due to someone getting hurt on the insured property. Or, if they accidentally damage another person’s property, liability coverage can protect them against financial losses. If an incident occurs, the homeowner can file a claim with the insurance company. At that point, the insurance company will send an adjuster to the property to assess the damage and assign a value.

What Doesn’t Home Insurance Cover?

Every policy is different, but there are some general items that most insurance policies do not cover. They include:

• Damage from earthquakes
• Flood damage
• Maintenance issues

Like a home warranty, home insurance won’t cover the entire bill. Rather than a service fee, homeowners using their home insurance policy will have to pay a deductible for each instance. For example, if the homeowner’s insurance deductible is $1,000 and a covered event occurs with a total value of $3,000, the homeowner will receive $2,000 for the damage ($3,000 less the $1,000 deductible).

For more information and description of differences please click here...

DRE ID # 01769353

NMLS ID # 394275

What Is Mortgage Refinancing?

 

Mortgage refinancing can help homeowners save money by reducing their interest rate and improving the terms of their mortgage. If interest rates have dropped since you first took out your mortgage, refinancing may lead to significant savings.

However, refinancing may not pay off in every situation. Learn what mortgage refinancing is, how it works and when it might save you money.

How does a mortgage refinance work?

Mortgage refinancing allows you to replace your existing mortgage with a new one, ideally with a lower interest rate and more favorable terms. When you refinance, you'll receive money up front to pay off your old mortgage. Then, you'll begin paying the balance of the new loan.

If you're considering a refinance, you have a few options:

• A traditional refinance covers only the amount you still owe your lender, known as the principal.
• A cash-out refinance, on the other hand, replaces your old mortgage with a larger one that allows you access the difference between the two loans in cash, which can be used to fund major expenses, such as a college education, or renovations that might increase the overall value of your home.

Common reasons for mortgage refinancing

You might refinance your mortgage for a number of reasons:

• Lower your interest rate. If market conditions or other circumstances have changed over the life of your loan, you may qualify for a new mortgage with a lower interest rate. For example, interest rates may drop if the economy has improved since you first took out your mortgage. Alternatively, an increase in your credit scores may boost your creditworthiness in the eyes of your lenders, which may help you qualify for a better interest rate. Your credit scores are among the factors that lenders consider when setting the interest rate and other terms of your mortgage.

• Change the mortgage length. Refinancing may allow you to shorten the length of your loan. This means you'll pay off the mortgage faster, leading to fewer interest payments over time. Depending on your new loan's interest rate, however, a shorter term may mean you owe higher mortgage payments each month.

• Change the mortgage type. If you have an adjustable-rate mortgage (ARM), your interest rate may change in response to market conditions. Fluctuations in your interest rate can get expensive, especially if you took out your loan when rates were low. To help stabilize or lower your interest rate, you might refinance to a fixed-rate loan.

• Access cash. A cash-out refinance allows you to borrow against your home equity with a new loan that's worth more than what you owe on your current mortgage. You'll then receive a lump sum in cash you can use to pay for major purchases. Cash-out refinance loans typically have lower interest rates than personal loans or credit cards.

How to know when to refinance your mortgage

Should you refinance or not? Unfortunately, there's no definitive answer to this question. Whether a refinance is right for you depends on your unique circumstances.

If you're considering a mortgage refinance, evaluate whether your financial situation has meaningfully changed since taking out your original loan. Have your credit scores improved? Have you increased your income significantly? If either applies to you, you may now qualify for a better offer from your lender.

Next, determine if market interest rates have dipped in the intervening years. Consider refinancing only if your lender offers a new interest rate that is at least 2% lower than your current rate. You'll also need to consider the current length of your mortgage. If you only have five years of payments left, it's likely best to stick with your current loan. If your mortgage is new, be aware that most lenders have a waiting period of zero to 210 days before you'll be able to refinance. Attempting to refinance before this period is up could result in a significant penalty fee.

Finally, don't forget to factor in closing costs — a collection of fees and other expenses you'll pay on closing day. These generally total between 2% and 6% of the loan amount, adding a high cost to your refinanced loan. Before you sign on the dotted line, make sure that your closing costs don't exceed any potential savings. Source

DRE ID # 01769353

NMLS ID # 394275

The Power of Getting Pre-Approved

 

Buying a home is exciting — but let’s be honest, it can also feel overwhelming. As we move through 2026, buyers will need to navigate a housing market shaped by shifting inventory, evolving buyer demand, and fluctuating mortgage rates. In this environment, preparation isn’t just helpful — it’s essential.

One of the smartest first steps you can take? Getting pre-approved for a mortgage.

Why is a pre-approval so powerful?

A pre-approval isn’t just another box to check — it’s a strategic advantage. Here are five key ways it sets you up for success in today’s market:

1. Know Your Budget and Shop With Confidence

A pre-approval shows you exactly how much home you can afford, helping you set realistic expectations before you start touring properties. That clarity saves time, reduces stress, and keeps you focused on homes that truly fit your financial picture.

2. Stand Out to Sellers and Strengthen Your Offer

In competitive markets, sellers want certainty. A pre-approval shows that your finances have already been reviewed and verified by a lender, positioning you as a serious, well-prepared buyer. When multiple offers are on the table, that credibility can be the difference between winning and missing out.

3. Move Faster When the Right Home Comes Along

Much of the financial legwork is completed during the pre-approval process, which means fewer hurdles once you’re under contract. That efficiency can help you close faster — an advantage sellers often prioritize when choosing an offer.

4. Protect Your Rate and Save Over Time

Depending on market conditions, a pre-approval may allow you to secure a more favorable interest rate. And even small rate differences can add up to significant savings over the life of your loan.

5. Catch Potential Issues Early

A pre-approval includes a review of your credit and financial documentation. If there are any errors or red flags, you’ll have time to address them before they can delay — or derail — your purchase later in the process.

Source

NMLS ID 394275 | DRE ID 01769353

Investors: Looking to Purchase Under Your LLC?

 

 We Can Help.

If you’re expanding your real estate portfolio, now is a great time to explore financing options that allow you to purchase investment properties directly under your LLC. This approach can offer clearer liability protection, streamlined bookkeeping, and a more professional structure for growing your holdings.

Whether you’re acquiring rentals, short-term properties, or long-term assets, we can walk you through:

• Loan programs designed for LLC-owned properties
• Requirements and documentation you’ll need
• How to structure your purchase for smoother underwriting
• Opportunities to leverage equity for your next investment
• Ready to grow your portfolio with confidence?

Let’s review your goals and find the right financing strategy for your LLC.

NMLS ID 394275 | DRE ID 01769353

What Is A Foreclosure?

 

Foreclosure is a process that’s triggered when a homeowner fails to make their mortgage payments. When a home is foreclosed on, a lender typically repossesses the property and attempts to sell it to recover their loss. Mortgage loans are secured by real estate. Because the home serves as collateral for the loan, a lender can legally repossess the property when a borrower fails to make their monthly mortgage payments.

What Is The Process Of Foreclosure?

While the foreclosure process may differ slightly from state to state, homeowners will likely experience common steps.

A lender contacts a homeowner to inform them of their delinquency and notify them about the possibility of foreclosure. The lender and homeowner explore options to keep the loan current. If the homeowner can’t bring their mortgage up to date, the lender may proceed with foreclosure. Depending on your state’s laws, your lender may file with a court to initiate foreclosure.

Early Intervention

Before a lender can proceed with foreclosure, the loan must be at least 120 days delinquent (with some exceptions). Lenders and loan servicers are required to make good faith efforts to contact a borrower about missed payments and foreclosure alternatives. A borrower can even take advantage of a few options to avoid losing their home even after a lender initiates the process. If there is no resolution, the lender usually initiates foreclosure once the borrower has missed at least four payments.

Foreclosure Counsel And Notice Of Default

Servicers or lenders referring a loan to foreclosure counsel is the first step in the foreclosure process. Depending on state laws, an attorney will initiate the process by filing a complaint or notice of mortgage default. Defaulting means a borrower has failed to repay a loan according to a lender’s terms.

Even after the first legal action, borrowers can apply for loss mitigation and look into options to avoid losing their homes.

Judicial Foreclosures Vs. Nonjudicial Foreclosures

There are two types of foreclosures: judicial foreclosure and nonjudicial foreclosure;

• Judicial foreclosures are usually more time-consuming than nonjudicial foreclosures. While all 50 states allow judicial foreclosures, some states require it. Judicial foreclosure requires a lender to file a lawsuit in court. The borrower receives up to 30 days to respond to the lawsuit. If they don’t respond, the court may rule for the lender, and the house can be foreclosed and sold. If they respond and go to court, the case will go before a judge to decide whether a settlement can be reached or the lender can foreclose.
• Nonjudicial foreclosure typically occurs when a mortgage has a power of sale clause, or the promissory note is tied to a deed of trust. If a borrower defaults on a mortgage with a power of sale clause, the lender doesn’t need to go to court. They can auction off the home after the warning and waiting period outlined in the state’s laws. In the case of a deed of trust, the trustee, usually a title company, can seize a property and sell it without a court order.

Eviction

If a homeowner can’t bring their loan current, eviction will likely be the next step in a foreclosure proceeding. Homeowners may receive a notice to quit from the lender to leave the home. How lenders contact homeowners varies by state. A letter or warning typically includes the timeline residents have to vacate the property – usually 3 – 30 days. Lenders may sue if residents ignore an eviction notice and stay in the home.

Foreclosure Added To Credit Report

A foreclosure is an adverse event that stays on your credit report 7 years from your first missed mortgage payment. Your existing credit history will significantly impact how foreclosure affects your credit score.

The hit your credit takes from a foreclosure can hurt your ability to purchase or rent a home. Many lenders won’t consider an applicant with a foreclosure on their credit report, but some lenders may be more forgiving, especially if the foreclosure happened years ago. Source

DRE ID # 01769353

NMLS ID # 394275

What Is A Conventional Loan?

 

Conventional loans, the most popular type of mortgage, come in two flavors: conforming and non-conforming.

• Conforming loans: A conforming loan “conforms” to a set of Federal Housing Finance Agency (FHFA) standards, including guidelines around credit, debt and loan size. When a conventional loan meets these standards, it’s eligible to be purchased by Fannie Mae and Freddie Mac, the two government-sponsored enterprises (GSEs) that comprise much of the mortgage market.
• Non-conforming loans: These loans do not meet one or more of the FHFA’s standards. One of the most common types of non-conforming loan is a jumbo loan, a mortgage in an amount that exceeds the conforming loan limit. Non-conforming loans can’t be purchased by the GSEs, so they’re a riskier prospect for lenders.

Pros of conventional loans

• Available from the majority of lenders
• Can be used to finance primary residences, second or vacation homes and investment or rental properties
• Can put down as little as 3% for a conforming, fixed-rate loan

Cons of conventional loans

• Need a credit score of at least 620 to qualify
• Lower debt-to-income (DTI) ratio threshold compared to other types of mortgages
• Need to pay private mortgage insurance (PMI) premiums if putting less than 20% down

Who are conventional loans best for?

If you have a strong credit score and can afford to make a sizable down payment, a conventional mortgage is the best pick.

“Conventional loans are flexible and suitable for a wide range of homebuyers, especially those with good-to-excellent credit scores, stable income, and some savings for a down payment,” says Matt Dunbar, senior vice-president of Southeast Region for Churchill Mortgage. “These loans offer competitive interest rates and flexible terms, making them attractive to buyers who meet the qualification criteria.” Source

DRE ID # 01769353

NMLS ID # 394275

Chattels and Fixtures in Real Estate: Protecting Your Purchase

 

Understanding the distinction between chattels and fixtures is essential in any real estate transaction to ensure a seamless purchase and avoid post-closing complications. Chattels, being movable personal property, typically appliances, furniture, and decorations, are not automatically included in the sale unless specifically listed in the Agreement of Purchase and Sale. They differ from fixtures, which are permanently affixed to the property, such as built-in cabinetry, light fixtures, and HVAC systems, and are presumed to be part of the real estate unless explicitly excluded in the APS.

While thorough attention during the transaction process is crucial, parties must also be ready to tackle potential post-closing issues, especially those related to the condition and functionality of chattels and fixtures. Problems may arise when items included in the APS are found to be missing, damaged, or not functioning after closing. By default, chattels and fixtures specified in the APS are expected to be in working order at the time of closing, making it the seller’s responsibility to ensure they meet this standard. Common post-closing complaints involve faulty appliances and systems such as ovens, dishwashers, air conditioning units, furnaces, security systems, and locks. If any such items are defective, the buyer may have grounds to seek remedies from the seller. However, when the APS explicitly states that the property, including its chattels and fixtures, is sold “as-is,” the buyer’s options for recourse are significantly limited unless the seller has concealed or misrepresented material facts.

A pre-closing walkthrough is essential for buyers to confirm the condition and functionality of chattels and fixtures included in the APS. This step ensures appliances are operational, light fixtures are intact, and all agreed-upon items remain on the property. If issues are discovered post-closing, buyers should first review the APS to understand their options, as it specifies the items included and their expected condition. Clauses requiring items to be in “working condition” or providing warranties strengthen the buyer’s position. Buyers can then negotiate with the seller for compensation or repairs, as many sellers prefer to resolve minor issues amicably. If negotiations fail, buyers may pursue legal action, such as filing in small claims court for lower-value disputes, provided they can demonstrate a breach of the APS or concealed defects.

Home warranties or insurance can offer solutions for addressing defects. A home warranty plan may cover certain appliances or fixtures, so buyers should review its terms carefully. For systems like plumbing or HVAC, filing an insurance claim might be an option. If repairs are needed, buyers should document all costs to support negotiations or potential legal action.

Preventing disputes over chattels and fixtures starts with a well-drafted APS. These items are integral to real estate transactions, and disagreements about their condition or presence can cause significant frustration post-closing. Buyers can minimize risks by adopting a proactive approach, including precise APS terms, thorough pre-closing inspections, and detailed documentation. Should issues arise after closing, understanding your legal options and engaging in fair negotiations with the seller can help resolve matters efficiently. Source

DRE ID # 01769353

NMLS ID # 394275