Hello:And Good News! You can use a Reverse Mortgage, now, to purchase a home.
This morning I came across this home-downsizing article by Ariane Seifert, and have included excerpts from it below.
At one time I would that thought what a great article. What a great idea. But immediately I would have thought, How? How can a retiree downsize from their long-term home? How can they do that, but remain in the same area where they raised their family, made lifelong friends, where these friends and family still live, where they know and trust the local stores, services, medical care they have used for years?
Prices have risen for dramatically in the last 10, 20 or 30 years, while the current retiree was living in their family home. (This, in spite of the current turn-down in prices, still leaves a lot of retirees with plenty of equity.) And while that is good, because if they sell they'll get a huge influx of money. But, the home they want to downsize into, in the same neighborshood, will cost too much for them.
The equity from the sale of their current home will not be enough to buy the new home free and clear, and with lower fixed retirement income they won't be able to qualify for a safe, predictible fixed-rate loan (and I think we've learned from the current home market that an adjustable home loan is not a good thing for people on fixed incomes).
How, you ask? First, talk to a realtor and find out the value of your home,. Then you can figure out just how much equity you'll have after settlement for a down-payment.
Second, once you know how much money you'll have for a down payment, go have a bit of fun exploring the new retiree communities, or a home closer to your children and grandchildren, or the place you've dreamed of living out your retirement.
Get excited at the many improvements in homes that have been built with all the new conveniences; even price in adding some of the safety features you'll need as you age, such as no stairs, safety bars in the bath and shower, or a walk in tub with water jets so you can soak in a hot tub and get relief from those old aches and pains. Age In Place, In Your Own NEW Home- a new one designed for retirement living.
And third, go talk to a reputable Reverse Mortgage Specialist. Sit down with your Realtor, and your Reverse Mortgage Specialist - bring in some family members or trusted advisors, and plan
realistically for what you can now afford to buy by combining some or all of your proceeds from the sale of your home, plus the proceeds of a Reverse Mortage. And end up with NO monthly mortgage payment.
And, finally, buy and move into that new home with no mortgage payments, lots of equity, and even a new savings account if you don't spend all the equity - or arrange to use only part of the Reverse Mortgage for the new home and leave the rest in a growing line of credit, so you have the security of knowing there is cash available for a vacation, for an emergency, or for even gifting to your children and grandchildren. Isn't it a nice thought so be able to see your heirs enjoy some of their inheritance before your are gone?
Read on for the benefits of downsizing!
And, as ususal, please call me for any information, or answers to questions you may have. I'll do all I can to make sure you learn all you want and need to know. Being a "senior" myself, I believe this prospect really exciting, and find it has opened up all kinds of new options for me and my husband.
Gloria
703-244-8151
Retirement tips: save money by moving .
Written by Ariane Seifert - © 2002 Pagewise
This article will give you ideas on how to save money with downsizing in your retirement years.
Most people save for their retirement all throughout their life. Hopefully, you are one of these people, and have been saving diligently for years and years for this time of your life. Sadly, even people who save as much as they can are not always fully prepared for their retirement years, although they have been saving as much
as possible throughout their lifetime.
Perhaps your 401k did not do well, or you went through some hard times with a low income, or maybe you went through several years where you did not put anything in your 401k. Although it may be a sacrifice in some ways, there are always ways to get yourself out of a bad spot.
Most people’s biggest investment is their house. Albeit, sometimes people go into large debt to own a huge, wonderful house and thus become house poor- but if you can afford the big house and the payments, it can be a decent way to save for retirement; especially if you don’t have any descendents that you are planning on giving the house to once you pass on. This is mostly true if you want to go the reverse mortgage route. ...
...There is usually no reason for a huge house when you retire. The kids are out of the house, and as you get older, you’ll probably want a smaller house (less to clean), and only one floor (don’t want to walk up flights of stairs with a broken hip!). Moving to a smaller house just makes sense sometimes. If you do opt to move to a smaller house, you can save the profit that you can make from selling your bigger house and use it to your advantage for your retirement!
You can invest it into a short-term investment, or just put it into a liquid savings account for emergencies during retirement. On top of that, you will have lower utility bills with a small house, and you can hold a huge garage sale when you downsize from a huge house to a small house.
You can make a lot of money by having a yard sale with all of the things that you have collected over the years, when you had more room in the bigger house. Getting rid of all of this stuff will no doubt make for extra cash that you can use during your retirement, and/or invest for the future.
Also, many older people may feel alone in a huge house, or a huge house that used to have children in it may be too hard emotionally—all of those memories! The house may be too quiet. It may feel different now that the kids are out of the house...
...It might be a good idea to move out of the “family with kids” house and move into a “2 person family” house or even an apartment. There are some perks to moving to an apartment, such as not having to do any lawn work (sell that weed-wacker, all your other garden tools and lawn mower, and make some dough!), not having to worry about coming up with money to replace appliances when they die (maintenance does that!!), and of course having a lot of money for retirement that you profited from when you sold your house!
In addition, you will likely save money by not buying as many things to fill up your house. By buying a small house or apartment, you save money not only on utilities and other such bills that can really add up, but you also have less space to put things.
You may no longer have an attic to store things. You may no longer have 5 closets to put your collectibles in. Having less space is just an obvious way to save money, because you just can’t buy as much anymore when you don’t have anywhere to put it.
There’s always ways to save money. Even if you were not diligent about saving during your working years, there are ways to maximize your dollars in retirement.
At one time I would that thought what a great article. What a great idea. But immediately I would have thought, How? How can a retiree downsize from their long-term home? How can they do that, but remain in the same area where they raised their family, made lifelong friends, where these friends and family still live, where they know and trust the local stores, services, medical care they have used for years?
Prices have risen for dramatically in the last 10, 20 or 30 years, while the current retiree was living in their family home. (This, in spite of the current turn-down in prices, still leaves a lot of retirees with plenty of equity.) And while that is good, because if they sell they'll get a huge influx of money. But, the home they want to downsize into, in the same neighborshood, will cost too much for them.
The equity from the sale of their current home will not be enough to buy the new home free and clear, and with lower fixed retirement income they won't be able to qualify for a safe, predictible fixed-rate loan (and I think we've learned from the current home market that an adjustable home loan is not a good thing for people on fixed incomes).
But now! with the passing of the new Housing Foreclosure and Rescue Bill, (signed into law by the President on July 30th), for the first time the proceeds from a Reverse Mortgage may be used to purchase a new, principal residence.
Now downsizing makes sense for hundreds of thousands of retirees or would-be retirees!How, you ask? First, talk to a realtor and find out the value of your home,. Then you can figure out just how much equity you'll have after settlement for a down-payment.
Second, once you know how much money you'll have for a down payment, go have a bit of fun exploring the new retiree communities, or a home closer to your children and grandchildren, or the place you've dreamed of living out your retirement.
Get excited at the many improvements in homes that have been built with all the new conveniences; even price in adding some of the safety features you'll need as you age, such as no stairs, safety bars in the bath and shower, or a walk in tub with water jets so you can soak in a hot tub and get relief from those old aches and pains. Age In Place, In Your Own NEW Home- a new one designed for retirement living.
And third, go talk to a reputable Reverse Mortgage Specialist. Sit down with your Realtor, and your Reverse Mortgage Specialist - bring in some family members or trusted advisors, and plan
realistically for what you can now afford to buy by combining some or all of your proceeds from the sale of your home, plus the proceeds of a Reverse Mortage. And end up with NO monthly mortgage payment.And, finally, buy and move into that new home with no mortgage payments, lots of equity, and even a new savings account if you don't spend all the equity - or arrange to use only part of the Reverse Mortgage for the new home and leave the rest in a growing line of credit, so you have the security of knowing there is cash available for a vacation, for an emergency, or for even gifting to your children and grandchildren. Isn't it a nice thought so be able to see your heirs enjoy some of their inheritance before your are gone?
Read on for the benefits of downsizing!
And, as ususal, please call me for any information, or answers to questions you may have. I'll do all I can to make sure you learn all you want and need to know. Being a "senior" myself, I believe this prospect really exciting, and find it has opened up all kinds of new options for me and my husband.
Gloria
703-244-8151
Retirement tips: save money by moving .
Written by Ariane Seifert - © 2002 Pagewise
This article will give you ideas on how to save money with downsizing in your retirement years.
Most people save for their retirement all throughout their life. Hopefully, you are one of these people, and have been saving diligently for years and years for this time of your life. Sadly, even people who save as much as they can are not always fully prepared for their retirement years, although they have been saving as much
as possible throughout their lifetime.Perhaps your 401k did not do well, or you went through some hard times with a low income, or maybe you went through several years where you did not put anything in your 401k. Although it may be a sacrifice in some ways, there are always ways to get yourself out of a bad spot.
Most people’s biggest investment is their house. Albeit, sometimes people go into large debt to own a huge, wonderful house and thus become house poor- but if you can afford the big house and the payments, it can be a decent way to save for retirement; especially if you don’t have any descendents that you are planning on giving the house to once you pass on. This is mostly true if you want to go the reverse mortgage route. ...
...There is usually no reason for a huge house when you retire. The kids are out of the house, and as you get older, you’ll probably want a smaller house (less to clean), and only one floor (don’t want to walk up flights of stairs with a broken hip!). Moving to a smaller house just makes sense sometimes. If you do opt to move to a smaller house, you can save the profit that you can make from selling your bigger house and use it to your advantage for your retirement!
You can invest it into a short-term investment, or just put it into a liquid savings account for emergencies during retirement. On top of that, you will have lower utility bills with a small house, and you can hold a huge garage sale when you downsize from a huge house to a small house.
You can make a lot of money by having a yard sale with all of the things that you have collected over the years, when you had more room in the bigger house. Getting rid of all of this stuff will no doubt make for extra cash that you can use during your retirement, and/or invest for the future.
Also, many older people may feel alone in a huge house, or a huge house that used to have children in it may be too hard emotionally—all of those memories! The house may be too quiet. It may feel different now that the kids are out of the house...
...It might be a good idea to move out of the “family with kids” house and move into a “2 person family” house or even an apartment. There are some perks to moving to an apartment, such as not having to do any lawn work (sell that weed-wacker, all your other garden tools and lawn mower, and make some dough!), not having to worry about coming up with money to replace appliances when they die (maintenance does that!!), and of course having a lot of money for retirement that you profited from when you sold your house!
In addition, you will likely save money by not buying as many things to fill up your house. By buying a small house or apartment, you save money not only on utilities and other such bills that can really add up, but you also have less space to put things.
You may no longer have an attic to store things. You may no longer have 5 closets to put your collectibles in. Having less space is just an obvious way to save money, because you just can’t buy as much anymore when you don’t have anywhere to put it.
There’s always ways to save money. Even if you were not diligent about saving during your working years, there are ways to maximize your dollars in retirement.
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