Having been in the mortgage business since 2004, I can say with certainty there are no perfect people and therefore no perfect borrowers. Even though we are bombarded with what we should do, save 10-15% of our gross income, pay everyone on time, don’t get over extended, etc. Life happens.
For example, there have been 7 recessions in my lifetime. In the last 60 years, one third of the time the Dow Jones Industrial Average has been down overall for the year. We had Black Monday in 1987, the Great Recession of 2008-9, the economic impact of Covid 19, the dot com bust in the late 1990s, etc.
The point is, even those of us who are financially prepared suffer under the same circumstances. Life and its ups and downs affects all of us. Some recover faster than others based on their profession, education, experience or economic cycle.
Then there are the constant pressures of rising costs, inflation, job uncertainty, will Social Security be there for me when I retire, will I be able to afford medical care or long-term care should I need it? What if I outlive my money? Have I saved enough money for retirement? The list is overwhelming.
Even if you’ve followed Dave Ramsey’s baby steps or tried to, or whichever financial guru you follow, few people live with financial security as they get older. A recent article I read said that 46% of people entering retirement do so with a mortgage, the highest percentage in history.
Homeowners all have the same buckets of money that we draw from: wages, investments and home equity. Once we stop working, we are down to investments and home equity. Most seniors I speak with don’t want to touch their investments, and more and more people are open to tapping their home equity.
A senior homeowner with 50% or more equity can: 1. Eliminate their monthly PI mortgage payment, that right there gives them some breathing room in their budget. If they have more than 50% home equity, they can 2. Access their equity tax free 3 ways: a) lump sum; b) monthly payments; c) line of credit that earns compound interest. When they draw on the proceeds, they are paid directly to the homeowner and the homeowner can use the proceeds however they wish, except purchase an annuity.
So, why are people reluctant to tap their home equity? There are a few reasons. 1. They want to leave the house to their heirs (1% of children want their parents' home); 2. They were taught to pay off your home and not to have any debt, however in recent years fewer people own their homes outright; 3. Seniors have heard that reverse mortgages aren’t safe, are expensive, they can lose their homes, etc.
The truth is, a retirement mortgage also known as a reverse mortgage is the safest mortgage a senior can get. Why is that? They have to complete a 1-hour mandatory in person or phone counseling appointment with an independent 3rd party. When the reverse mortgage funds, about 50% of their home equity is protected from a market correction like we experienced in 2008-9. With a FHA backed reverse mortgage (aka HECM), the fees are set and capped by HUD. There is never a PI mortgage payment required. These are non-recourse loans, which means the only recourse the lender has is against the home, not against the borrower, their heirs or estate. There is no pre-payment penalty. And they retain ownership on title until they permanently move out. The loan term is age 150 of the youngest borrower!
When surveyed, 91% of senior homeowners said they want to remain at home and maintain their independence. Also, we know the number one fear a senior has is outliving their money. So, here’s what we have.
-senior homeowners who want to stay at home
-they fear running out of money
-many lived a reduced lifestyle while living on a fixed income
-they have investments they don’t want to liquidate
-and home equity that is frozen and not accessible
-they are making decisions about reverse mortgages from outdated and inaccurate internet info or uninformed neighbors or well-meaning family
When a senior homeowner takes the time to learn about how a reverse mortgage can help them. Their reactions are these: 1. What’s the catch? This sounds too good to be true and 2. How come everyone isn’t getting a reverse mortgage?
The best thing to do is to explore all options to see if a reverse mortgage makes sense for you. The qualifications are senior friendly, and we can usually close in 30-45 days.
Explore your options and see how a reverse mortgage can change your life.
A retirement mortgage doesn’t have to be complicated when you have a professional help you along the way. Contact our team today to get the wheels in motion a (877) 251-9709
Listing your home in the late summer might sound daunting. But selling a home in August can be a good strategy, as the market is typically active with buyers motivated to move for the new school year or to settle in before the holidays. Make your property stand out with these easy-to-implement strategies.Leverage the Longer Summer DaysLonger days mean you have more daylight hours to show your home. Daytime showings allow sunlight to flood your rooms to better highlight architectural details, finishes and flooring. In general, natural light makes spaces appear larger, warmer and more inviting.Keep Up the Curb AppealFirst impressions are crucial. Youll need to be at the top of your outdoor maintenance game. That means grass is always cut, weeds are pulled and shrubs are trimmed. Other essential tasks include power washing the exterior, cleaning windows and touching up paint where needed. Work with your real estate agent to understand the best way to bump up your curb appeal within your budget.Show Off Your Outdoor SpacesMaybe you have a spacious deck or a thriving garden. Its worth spending a little time staging these areas to highlight them as extensions of your living space. Be sure these spaces are clean, inviting and free of weeds or debris. Consider adding some outdoor lighting to create ambiance and emphasize features like walkways, trees or sitting areas.Add Seasonal TouchesTurn up the summertime charm with a few easy touches both outdoors and indoors. Add late-summer blooming plants like asters and mums near your front door. Place fresh, seasonal flowers around your home to add color and fragrance. Incorporate pillows and throws in late summer colors like deep yellows and oranges. Another appreciated touch: Add a tray of lemonade and glasses to your counter or island for open houses or showings. Lastly, August can get hot and muggy! Keep your air conditioning running at a comfortable temperature so your guests have a distraction-free touring experience.With a few extra steps, you can capture the magic of summer season and help potential buyers picture themselves relaxing on your deck with a cool drink. Remember these buyers are highly motivated, so make your property the one that shines!
Sellers, take note and embrace the holiday joy! If youre planning to list your home this season, early fall is the perfect time to prepare your home for the market. Youll face less competition and buyers will be highly motivated to settle into new digs in time to ring in the new year.1. Less CompetitionDuring spring and summer, there are historically more homes on the market. During the holidays, there are typically fewer listings, making it easier for your home to really stand out and shine to potential buyers.2. More Serious BuyersAmid the hubbub, people are extra busy gift shopping and attending celebrations. Consequently, youre not likely to get many just-looking buyers. Anyone home shopping during the holidays will be more focused and more likely to make a strong initial offer.3. End-of-Year Financial AdvantagesFinalizing a home sale before the end of the year can provide potential financial benefits, such as deductions on property taxes, mortgage interest and other home-related costs. 4. Job Relocation SeasonSince January is a common window for job relocations, buyers may need to settle into a city and home by the end of the holiday season. Your home may be the answer to their relocation prayers!5. Faster ClosingsSince everyone is busy decking the halls, buyers and sellers will both be interested in moving things along expeditiously. And because all the professionals involved for a sale will have fewer closings on their plate, your transaction will get even more attention.6. Cozy VibesWhile winter weather can be daunting, nothing beats coming in from the cold to a warm, cozy home adorned for the season. Just turn up the heat, have a yummy treat in the oven and be sure to keep your sidewalks clear of snow and ice. Along with your festive outdoor lights, youll appeal to buyers sentimentality with all the decorative touches.Listing your home during the most festive time of the year can lead to more serious and qualified buyers and a fresh start for the new year. Contact your local Coldwell Banker agent to get a jump start on listing your home in time for the holidays.
Going green is easier than you think! Small changes around your home can make a big impact on the environment, your health and your bank account. Try implementing these affordable ways to improve the overall quality of your home life.Insulate and Seal DraftsAdding insulation to your attic or walls can reduce energy loss and also keep your home warmer in the winter and cooler in the summer. Sealing gaps around windows and doors prevents drafts and saves energy.Install a Programmable ThermostatConsider installing an upgraded thermostat, which automatically adjusts the temperature based on your schedule. The result is that you conserve energy when youre not home and optimize comfort when you are.Unplug Electronic DevicesWhile youre sleeping, did you know your devices might be driving up your electricity bill? Even when powered down, plugged-in items like computers, countertop appliances, video game consoles and other electronic gadgets could be gobbling up energy.Consider Energy-Efficient AppliancesIf your budget permits, consider upgrading your dishwasher, refrigerator, washing machine or other appliances to more energy-efficient models. While theres an up-front cost, you can save money over the long term. According to the U.S. Environmental Protection Agencys Energy Star program, household appliances account for nearly 11% of energy use in an average house.Switch to LED LightingReplacing incandescent bulbs with LED lights will reduce energy consumption and lower your electricity bill. Savings are significant. For example, Energy Star-certified LED lighting uses 90% less energy than incandescent lighting and lasts 35 to 50 times longer.Close Curtains and BlindsHeres a simple tip that wont cost you a dime! On hot, sunny days, keep your blinds or curtains closed to keep the heat out and reduce AC use. In colder weather, close window coverings to minimize heat loss.Establish Eco-Friendly Cleaning RoutinesChoosing biodegradable or non-toxic cleaning products will reduce the number of harmful chemicals in your home. You can even make your own cleaners using pantry staples like baking soda, lemon juice and vinegar. Establish other good habits, like only running the dishwasher or washing machine when its a full load to cut down on energy use.Green living is achievable with some simple steps. Not only will you reduce your environmental footprint, but your home will be more comfortable and youll reap tangible cost savings over time.