Archive for May, 2015

5 Factors That Indicate It Could Be Time To Move

Saturday, May 30th, 2015
Time to Move

Think about it. Right now could be the perfect time to move.

I’m just getting back from relocating my sons in South Carolina, and now I’m thinking, “Is it time to move?” “Should we simplify our life and downsize?” “Do we need to move up to a bigger home?” “Is now the best time to sell, or will it be best to sell 5 years from now?” “Will the market be as strong then as it is now?” “Is it time to leave Brooklyn?” We need to start planning now.

Choosing to move is a big decision. There are many lifestyle and financial factors to consider and a lot of questions that must be answered. Here are 5 factors that indicate it could be time to move:

  1. Life events call for a move up to bigger or different. Company comes to visit. Some stay overnight and there just isn’t anywhere for them to sleep. An aging parent is moving in with the family because they can no longer care for themselves. Closet space is limited or overcrowded. The little kids are now big kids outgrowing shared bedrooms or the number of children in your family has increased. You’ve started an at-home business and need a home office. The space in your home just isn’t cutting it any longer. It could be time to move.
  2. Your life has changed, really changed. Baby Boomers, folks in their 50’s and 60’s, are becoming empty nesters. This is an important life change that trumps all other reasons to sell a home. For example, our sons wanted to establish their independence but realized Brooklyn was too expensive for them to live on their own. They chose to move to South Carolina for affordability and even bought their first home. Now my wife and I need to move into a home that sync’s with our empty nesting phase in life, a home that makes more sense for our life as we now know it. Becoming an empty nester, taking on a new job that comes with a new, long commute, retiring, divorcing, etc., are all significant reasons that can indicate it is time to move.
  3. Home improvements and landscaping are being neglected. Is it time to move on to a maintenance-free way of life? Are home improvement projects and landscaping no longer fun to do? Do you have time to keep up with it all? Maybe you are now physically challenged and are unable to paint, plant or hammer. If your home and yard are being neglected, it will take more money to get it ready to sell. What’s even worse is you may have to ask for a lower price to get your home sold. It may be time to move to a smaller and simpler home that you can take good care of.
  4. The market is strong. The shortage of houses for sale in Brooklyn is an extra incentive causing bidding wars. The backlog of homebuyers means multiple offers on new listings and higher home prices are normal. The value of a house in Brooklyn is soaring! According to the National Association of REALTORS®, total existing-home sales increased 6.1 percent in March – the highest annual rate since September 2013. The number of houses for sale, however, has experienced a fairly small increase of 2 percent above a year ago making it a seller’s market!
  5. You have equity in your home. Many homeowners have positive equity in their homes and don’t realize it. According to Corelogic’s Third Quarter 2014 Equity Report, 94 percent of homes priced at $200,000 and above have positive equity. You may have lost your home’s equity during the housing crash, but don’t stay there in that mindset. Have your home reappraised to find out how much equity you have built in your home. Selling may be an option once again, and it could be time to move.

Now just might be the time to move, to finally put your home on the market. The seller’s market may switch to a buyer’s market as more homes come on the market. Mortgage rates are predicted to stay low because of geopolitical unrest and lower oil prices keeping inflation in check. Take a look at all your opportunities. How long will they be as good as they are today? Staying in Brooklyn doesn’t get easier, and market where you are considering moving to is getting stronger.

Call your Brooklyn real estate agent with Fillmore Real Estate, Charles D’Alessandro at (718) 253-9600 ext 206 or email [email protected]. If you’ve been wondering about moving for a while, now might be the best time to move.

Sources:

http://www.inman.com/2015/04/29/boomerang-buyers-recovery-or-bubble-repeat/

http://www.inman.com/2015/04/29/pending-home-sales-rise-for-3rd-straight-month/

http://www.marketwatch.com/story/five-real-estate-trends-to-watch-in-2015-2014-12-29

The 2 Sides Of A Reverse Mortgage

Friday, May 15th, 2015
Reverse mortgage

A reverse mortgage has 2 sides: Benefits and Drawbacks

You’ve probably heard of a reverse mortgage, but do you know what a reverse mortgage is? A reverse mortgage, or Home Equity Conversion Mortgage (HECM), is a type of home loan for senior homeowners, 62 years or older, that uses the home’s equity as collateral. Cash payments are paid to a senior homeowner based on their home’s equity. A reverse mortgage provides cash payments to a senior homeowner by allowing them to convert part of the equity in their home into cash. Generally, the loan is not due until the last surviving homeowner dies, sells or moves out of the home. The homeowner is responsible for property taxes, homeowners insurance, upkeep and any relevant condominium fees.

When the last surviving homeowner dies, sells or moves out of the home, the estate must pay off the reverse mortgage or sell the home to pay back the loan balance. The estate has roughly 6 months to do so. If there is any remaining equity, the estate inherits the remainder. If the home sells for less than the balance of the reverse mortgage, the estate is not personally liable.

The idea for a reverse mortgage came about because retired senior homeowners with limited incomes needed a way to pay for health care and monthly living expenses. Thus, the reverse mortgage was created and without restriction on how it would be used by the senior homeowner. It allows senior homeowners to use the equity they have built in their homes to help them pay for health care costs and their basic monthly living expenses or take a vacation if they so choose.

A reverse mortgage differs from a traditional mortgage, because the lender pays the homeowner cash rather than homeowner making monthly mortgage payments.

A reverse mortgage can be a good way for retired homeowners to increase their spending power and financial security in retirement. However, there are 2 sides to reverse mortgages, benefits and drawbacks.

Benefits of a reverse mortgage:

  • You can live in your home for as long as you want without a monthly mortgage payment and improve your immediate financial situation.
  • You can tailor and utilize the reverse mortgage as a financial planning tool.
  • Your home cannot be taken from you for non-payment as in a home equity loan. You do not make payments on the loan until you permanently leave the home.
  • You will never owe more than the value of your home at the time the loan is paid off. This is a great advantage if you secure a reverse mortgage and then the price of your home drops.
  • Whether you receive the money from a reverse mortgage as fixed income or in a lump sum, the money is typically tax-free.
  • You may use the money from a reverse mortgage however you see fit.
  • You can receive the money from a reverse mortgage in one lump sum, as annuity, a credit line or even as a combination of these.
  • You maintain homeownership of your home and are able to live in your home.
  • You can rest assured that you have a place to live for as long as you want when you secure a reverse mortgage.
  • A reverse mortgage is federally insured.
  • A reverse mortgage can increase your spending power and financial security in many ways.

Drawbacks of a reverse mortgage:

  • Upfront fees on a reverse mortgage are high. (Learn more about reverse mortgage fees here: Reverse mortgage rates and fees)
  • Even though you make no monthly payments on a reverse mortgage, the amount of interest you owe and the amount you must eventually pay back accumulates over time.
  • You may have built a lot of equity in your home, but a reverse mortgage might allow you to use only some of it. The amount of your reverse mortgage loan is determined by the appraised value of your home, what you still owe on your home, your age and what the current interest rates happen to be.
  • A reverse mortgage is the opposite of a traditional home loan. It is a mortgage in reverse. You accumulate the loan over time and pay it all back when you are no longer living in your home. This can be difficult to grasp.

The benefits of a reverse mortgage clearly outnumber the drawbacks, but a reverse mortgage is not for everyone. Here are three things to consider before securing a reverse mortgage:

  • If you are eligible for low-income assistance, securing a reverse mortgage could disqualify you from Federal or State government assistance.
  • If you are planning to move in the near future, a reverse mortgage is not a good idea since the loan is due when “the last surviving homeowner dies, sells or moves out of the home.”
  • A reverse mortgage decreases the equity in your home and affects your estate. (See Innovative Uses of a Reverse Mortgage for more information on these options)

Studies have shown that more than 90 percent of those who have secured a reverse mortgage have less stress and the freedom to choose to live the life they want to live. Learn more about the fees associated with a reverse mortgage or instantly estimate your reverse mortgage loan amount with the Reverse Mortgage Calculator.

Brooklyn real estate agent with Fillmore Real Estate, I have been collaborating with and helping my clients buy or sell their Brooklyn homes for over 27 years. Do you have further questions about a reverse mortgage? Contact me, Charles D’Alessandro, at (718) 253-9600 ext 206 or email [email protected]. I know real estate and will be happy to answer any questions you may have. Just ask!

Resources:

http://www.newretirement.com/reverse-mortgage/reverse-mortgage-disadvantages-advantages.aspx?nr_product=revmort&nr_a=LI_BidManager&nr_placement=&nr_medium=display&nr_creative=rmdown_blkwhteleg&nr_size=LREC&nr_campaign=StandardCPMV2&nr_adgroup=Desktop&nr_adtype=STTC&utm_medium=display&utm_source=LI_BidManager&utm_content=rmdown_blkwhteleg

http://www.reversemortgage.org/about.aspx

http://reverse.org/what-is-a-reverse-mortgage/