A Look at 125% Home Equity Loans

The origin of the 125 percent home equity loan was the ever increasing demand for borrowing. As the name implies, this loan will grant the borrower the right to borrow up to 125 percent of his home’s value. Let’s say, for example, that one’s home is worth $100,000 and his mortgages also total $100,000; the 125 percent loan, in this case, would allow him to borrow an additional $25,000. Before applying for one of these loans, there are four important things to keep in mind.

What is a 125 Home Equity Loan?

One of the primary reasons that people end up choosing this type of loan is because the process is easier than refinancing and has fewer attached fees. This type of loan will create a second mortgage on one’s home, but it is a strategy that can be used for paying down high interest debt. The interest rate on this type of loan is usually much lower than the interest rate on credit cards.

 

What Type of Situation Calls for Using This Loan?

If a person finds himself trapped in a corner financially due to an unforeseen bill or some other severe adversity, this loan may be a good choice for him as an alternative to losing his valuable home. However, before applying for this type of loan one needs to lay out a detailed and organized plan for paying back the loan.

The easiest way to find one of these loans is to call the banks in the person’s area and ask about 125 percent home equity loans. Most of the institutions around probably do not. In reality, one will find that it is simpler and less time consuming to secure one of these loans from an online bank. If one uses an online bank, it is unlikely that he will ever actually meet the lender face to face.

Risks Associated with 125 Home Equity Loans

Before undertaking one of these loans, be sure to acquaint oneself with its riskiness.One of the most important reasons to not get this loan is that it will make selling the borrowers house very difficult. Furthermore, one will not be able to take a tax deduction against the 125% home equity loan if it ends up surpassing the market value of his home. However, this may still be a good option for a person if he can use this short term debt to improve his financial standing.

California Fair Claims Settlement Practices Regulations

Here is Why You Should Care About Educating Yourself Before Settling Your Insurance Claim in California

If you or anyone you know has had to deal with insurance companies, you know it could be a frustrating process. Sometimes people go into negotiating claims with their insurance companies without knowing basic procedures. What kind of guidelines do the insurers have to follow when settling a claim? Have you ever settled a claim and felt that you got taken? This article will help educate California insurance policy holders of certain regulations which were enacted to encourage insurance companies to settle claims in an ethical fashion.

What Are and Why Were the California Fair Debt Settlement Practices Regulations Implemented?

The California Fair Claims Settlement Practices Regulations were established to implement certain standards for the variety of Unfair Claims Practices set forth in California Insurance Code Section 790.03(h). Moreover, the legislature enacted these laws in response to California Supreme Court holding in Moradi-Shalal v. Fireman’s Fund, 46 Cal.3d 287 (1988), which established that California Insurance Code Section 790.03(h) did not give a private right of action to claimants who are third parties. Instead, the law provided that an administrative remedy be enforced by the Insurance Commission pursuant to already established regulations.

 

Who Does the California Insurance Regulations Apply To?

The California Fair Claims Settlement Regulations were not intended to provide definitions of all fair claims practices. Instead, the laws delineate specific minimum standards for claims settlements.

The Regulations apply to all claims, with the exception of worker’s compensation claims, healthcare malpractice liability insurance and self funded/self insured ERISA plans. Moreover, they apply to any entity that transacts the business of insurance in the state of California, all insurers who are admitted, as well as, non admitted insurers, with the exception of penalties and inspection. The Regulations also apply to first and third party claimants.

The Regulations Do Not Apply to Reinsureres

Essentially, the Regulations were created with the intention to require insurers to use and apply specific basic claim handling procedures to first and third party claims for first and third party claimants. However, the Regulations do not apply to reinsurers .

Make Yourself Aware of the Claim Handling Duties of Insurance Companies In California

Every insurance policyholder should make themselves aware of these laws. It is essential knowledge to have handy in your arsenal to give you an upper hand in settling a claim. Going into a settlement without knowledge of the Regulations is like going into a ring with Mike Tyson – without training and without a referee. Knowledge is power and information is the most valuable commodity. Arm yourself with the knowledge of the Regulations and deflect yourself from the possibility of becoming a victim of unethical claims practices. However, this is not legal advice and I highly recommend anyone with a claim to get a lawyer who you feel is best suited to help handle your claims. Good luck to you!