Reverse Mortgages

Anyone who has ever purchased a home is likely pretty knowledgeable about the mortgage process. But how many of us are familiar with the reverse mortgage?

Quite simply, a reverse mortgage is designed for home or condo owners 60 years of age and older who want to be able to access some of the equity in their properties without the demands of making monthly payments on a loan or line of credit.

A reverse mortgage can provide you with up to 40% of your homes appraised value, to be paid out in a lump sum, as needed, or by monthly, quarterly, semi-annual, or annual payments.

This influx of funds can provide the freedom to pay off debts, complete major home renovation projects, travel to dream destinations, purchase investment or recreational property, or supplement your retirement income.

And with that freedom also comes the knowledge that not one cent ever needs to be repaid until the home is sold.

So, what’s the catch?

Well, it depends on how you look at it.

While you maintain full ownership in your property, a reverse mortgage is registered on your title and must be repaid when you sell your home. Interest rates on reverse mortgages are higher than traditional mortgages or lines of credit, and because the interest accrues and is added to the balance, the amount of the mortgage gradually rises. Eventually you will end up with less equity for your estate or to pay expenses. If you look at it from the lender’s point of view, they are waiting for an unspecified period of time for repayment (as opposed to a traditional mortgage with regular monthly payments on the principal and interest) and the trade-off is higher interest rates.

Because property values will likely increase over the years and the loan is guaranteed to never exceed the fair market value of your home, most homeowners who take advantage of the reverse mortgage will usually have money left over once the property is sold and the loan is repaid.

The money obtained from a reverse mortgage is tax-free, won’t affect any type of government benefits you might already be receiving, and if you decide to invest some or all of the proceeds you might be able to deduct the interest against your income at tax time.

Some costs that the homeowner will have to incur in order to obtain a reverse mortgage include a home appraisal (around $200-$400), legal fees, and administration costs.Remember, a reverse mortgage is not for everyone. No one has an unlimited amount of equity built up – a reverse mortgage doesn’t change that fact.

As with any major financial transaction, it is advisable to get qualified independent advice you can trust before signing on the dotted line.

By Jacqueline Sharon

Choosing A Builder

You’ve been carefully considering all the pros and cons, and have decided to build the home of your dreams. Now what? Who do you trust with such a momentous, important part of your life? Not to mention your hard-earned money.

If you take your time and properly research potential builders, it should be a smooth, easy process.

Paul Kehler, President of Homes By Managen recommends, “Ask your friends, family, and co-workers if they have had any experience with home builders. Word of mouth is a great way to compile a list of builders you think might fit your needs. Then meet with at least three of them to see how you feel about the person you’re going to be dealing with. And make sure you ask for references.”

Kehler recommends getting references from people who have just recently taken possession of their new home, as well as from families who have owned their home for about two years, and finally from a past customer with a home that is around five years old. “And ask them if they would be willing to build with that company again,” Kehler says, “If they’re still as happy today as they were when they took possession that will give you a very good idea about the company you’re considering.”

When you’re deciding on a builder, you have a choice between production builders and specialized builders.

Production builders have standardized model homes you can visit, and standard features to choose from which helps to make the decision easier for the homeowner.  They’ve constructed many homes and have generally fine-tuned their floor plans to eliminate most potential issues.

Specialized builders typically operate at a lower volume, and can provide unique and functional plans that have been carefully drawn after detailed consultation with the homeowner. For those who don’t want to settle for the standard designs, this can be a great way to reflect their individual style.

Homes By Managen is a specialized builder with over 25 years of experience in the industry, and usually constructs fewer than 20 homes per year.  Paul Kehler explains that this allows them to spend more time with their clients. “We want to pay attention to the details. Our customers tell us what their needs are, how the home must fit their lifestyles, and we custom-design a residence to suit them. This allows us to be more creative, and come up with new and interesting ideas for our clients.”

Another consideration is the suppliers and sub-trades your builder will be using. Kehler says, “We’ve used that same suppliers and sub-trades for many years. We’ve developed a relationship with them because they’re experienced, knowledgeable, and take pride in their work.”

You will also want ask the builder about any warranties they may offer.  There are many different programs available, so you’ll want to carefully read through the warranty to make sure you’re well-covered.

Another way to protect yourself is to hire a builder who will work through a draw mortgage program with your lending institution. Funds are only advanced to the builder as the construction progresses, and only after inspections are passed.

Once you’ve found the right builder for you, the construction should be an enjoyable and exciting process.

Article by Jacqueline Sharon

Fun, Surprising Cost-saving Home Improvements

Who wouldn’t like to save money on utility bills this winter? But have you ever considered some of the more common energy-efficient home improvements – like insulating your hot water heater or replacing incandescent bulbs with compact fluorescents – and thought “dullsville”?

Sometimes the act of saving money just isn’t fun enough on its own. Fortunately, you can make home improvements that will trim your utility bills and boost your home’s appeal at the same time. Here are four fun home improvements that are surprisingly energy efficient as well:

1. Buy a new dishwasher – Or clothes washer. Older appliances were not only built to be less energy efficient, they can lose what little efficiency they had as they age. If your appliances are more than 10 years old, they likely use more energy and water than newer models, especially new models that are Energy Star qualified.

Dishwashers purchased before 1994 use an additional 10 gallons or more of water per cycle than a new Energy Star qualified model, according to EnergyStar.gov. And if you don’t have a dishwasher at all, don’t think of buying one as just a luxury. Energy Star says you’ll save 5,000 gallons of water and knock $40 per year off your utility bills if you give up washing dishes by hand – not to mention 230 hours of your time.

2. Beautify your bathroom – Kitchens and baths sell homes, but they’re also the rooms where the most water gets used and wasted. Old fixtures and faucets are among the top water-wasting culprits in a home. You can conserve water by turning off the tap when you brush your teeth, but that water savings goes down the drain if the toilet runs constantly when you leave the room.

Replacing leaky fixtures can reap significant water savings. Energy Star says a leaky faucet can waste gallons of water. Just one drip per second can waste up to 1,661 gallons of water in a year, according to EnergyStar.gov. You can also conserve water by installing a low-flow shower head, which can save you as much as 5 gallons of water during a 10-minute shower. Many manufacturers now offer stylish, water-efficient faucets and shower heads.

3. Let the sun shine in – A venting skylight is a fun way to fill your home with nourishing natural light and passive ventilation, but did you know it’s also energy efficient? Installing a venting skylight can help you lower your electric bill by reducing your dependency on artificial light and electric fans. Natural light has been tied to a host of health benefits, including improving mood. A skylight not only enhances the energy efficiency of your home, it adds decorating flair and could make you feel better about living there.

They’re also relatively low-cost when it comes to “luxury” home improvements. You can get an Energy Star qualified “No Leak Skylight” from Velux for about $1,000 per unit for a remote-controlled electric venting model that closes automatically should it rain.

4. Install a fireplace – Zone heating the areas of your home where you spend the most time can reduce your home heating bill by 20 to 40 percent, according to the Hearth, Patio and Barbecue Association. Installing an energy-efficient fireplace or a stove is a great, appealing way to zone heat the rooms you use the most.

What’s more, this type of heating can be “greener,” if you use renewable fuels like cord wood, pellets or other plant-derived materials in your high-efficiency stove or fireplace. As for the fun quotient, it’s hard to top a fireplace for a home improvement that adds warmth and appeal to a room.

Saving money can be doubly exciting, when you opt for energy-efficient home improvements that also enhance enjoyment of your home.

Bathroom Remodeling Hints: Small Price Tag, Big Impact

Unless you just completed a stunning bathroom renovation with a five-figure price tag, there’s probably at least one thing in your bathroom you’d like to change. Whether you’re dealing with a constantly leaky faucet or the whole room just looks drab and out of date, you can find many ways to make your bathroom beautiful again without breaking the bank or investing a huge amount of time. Here are a few tips to get you started:

Replace your tired old toilet. Upgrading to a sleek, easy-to-clean one-piece toilet is a surprisingly simple way to update your bathroom, and it doesn’t have to cost a lot, either. Toilet installations are often viewed as a job for a professional, but some new toilets are being designed with the do-it-yourself homeowner in mind. The new SAVER toilet from American Standard, for instance, can be installed without using any tools at all – just a simple hand-tightening is all that’s required. Plus, a new low-flow commode like the SAVER can pay for itself in water savings alone.

Clean up your caulk. If the caulk in your bathroom is grimy, prone to mildew, or cracked, replacing it is a great way to freshen up the look of your bathroom. Use a caulk softener, available at any hardware store, to soften the existing caulk and make it easier to remove. Then, a good scraping with a plastic putty knife will do the trick. After the caulk is removed, clean in between the tiles with a bleach and water solution, and allow to dry completely. Then you are ready to apply the new caulk. Tom Kraeutler of the home improvement blog TheMoneyPit.com recommends using a mildew-proof caulk for easier cleaning and longer-lasting good looks. Apply the caulk in between the tiles with a smooth, steady motion, and then smooth the surface with a moistened finger for a more even appearance.

Fancy up your faucets. Swapping out an out-of-date faucet is less expensive and time-consuming than replacing an entire pedestal sink or vanity, but can still have a big visual impact. Whether your style is clean and modern or romantic and ornate, updating your faucets can be easy and stress-free now that many manufacturers are offering easy-to-install bathroom faucets. For example, all lavatory faucets from American Standard and JADO  come with Speed Connect drains that contain only four parts -10 less than conventional drains – and are easy to install in minutes, without guesswork or special materials.

Paint your way to a beautiful bath. Freshening up the color on the walls in your bathroom can be an easy afternoon project depending on the size and structure of your bathroom. Because they are typically the smallest rooms in the house, bathrooms are a great place to experiment with color – if you hate it or change your mind, it’s easy enough to change to something else. Want to keep it simple? Pure white walls, especially when accented with glass and dark woods, are a current design trend.

Boost Resale Value by Accessorizing Existing Home Features

Resale value matters, whether your home is on the market now or your plans to sell are several years in the future. Whenever you make improvements to your home, you should keep the resale value of those improvements in mind, real estate experts advise.

Accessorizing existing features can be a more cost-effective alternative to making major improvements when your home is on the market. Whether it’s adding window box planters to the facade, or either manual or automated blinds to a skylight, accessorizing is a great way to increase the value of existing home features.

If you’re willing to spend a little money in order to (hopefully) make more money, here are some ideas for enhancing your home’s existing selling points by adding some great accessories:

Dashing Decks

Great outdoor spaces are attractive to buyers. But if your deck or patio is drab or in need of repair, what should be a selling point can turn into a detriment in the eyes of potential buyers. Sprucing up outdoor spaces is a low-cost way to make the most of this key selling point.

After you’ve given everything a thorough cleaning, look at cosmetic fixes and accessories that will make the space look more appealing. Built-in seating and planters are among the hottest deck trends this summer, and adding a few to your deck will cost a lot less than building a new one. A collapsible awning is another accessory that can make a deck more appealing – and help potential buyers envision themselves enjoying the shaded deck in the heat of summer.

Spectacular Skylights

Today’s no-leak skylights can be a strong selling point for your home. Skylights provide natural light without compromising privacy, can help with ventilation, and help reduce dependency on artificial lighting sources. If you already have a skylight – in the bathroom, kitchen or elsewhere in your home – accessories can help boost its appeal for buyers.

Whether your skylight is fixed or venting, here are some accessories that can enhance its value:

* Blinds – Virtually every type of blind is now available for skylights, including Venetian, blackout and roller blinds. Blinds can allow you to better control the flow of light and heat into your home through the skylight.

* Remote controls – If you have a fixed skylight, replacing it with a manual venting or electric venting model provides a chimney effect making it easy to vent stale air and humidity. You can also use the same remote to control your electric skylight and blinds.

* A home automation interface – Home automation systems control alarm systems, blinds and lighting throughout a house. You can interface your skylight and accessories into a home automation system.

* Moisture sensors – These special sensors detect precipitation and automatically close an electric venting skylight when the weather turns wet.

Fantastic Fireplaces

A fireplace can be an asset – if it inspires potential buyers to envision themselves curled up in front of it with a steaming mug of tea on a wintry night. But if your fireplace is more likely to make buyers think of cleaning and renovation, you’re not getting the full value out of this much-desired home feature.

Start by making sure your fireplace is clean, whether it’s wood-burning or gas-powered. For gas-powered fireplaces, installing a blower that directs heat into the room can greatly enhance the unit’s effectiveness and appeal. Next, consider the cosmetics. For wood-burning units, you might add an attractive (and functional) screen, decorative andirons or a fireback, and shiny new tools. Gas units can get a boost that’s both practical and luxurious by creating a new mantel or improving an existing one, and adding a remote control.

Accessorizing can help you make the most of features your home already has – and ensure both you and your potential buyers fully appreciate all your home’s assets.

Ready to Renovate? How to Check Out a Contractor Before You Hire

Warm weather is here and it’s time to start thinking about those home renovation and home improvement projects you put on hold until the weather – or the economy – got better. While many indicators point toward a better economy, many contractors are still feeling the pinch, and are competing fiercely to win business.

The majority of contractors are honest, but you should still be cautious when hiring one. In 2010, the Better Business Bureau received more than 1.2 million inquiries about general contractors, making the industry the third-most researched on the BBB’s website. Consumers also lodged 5,005 complaints against general contractors in 2010, the BBB reports.

Before you hire anyone, it’s important to check a contractor’s business license and the business’ financial stability. Here are some steps that can help you ensure you’re choosing the right contractor:

Know the facts

Before you hire a contractor, it pays to check the company’s credentials, the viability of the company’s business and business history  because it could directly affect the contractor’s ability to get your job done. If the contractor has a history of liens and judgments or credit and collection problems, it could mean signs of trouble. For instance, the contractor may be unable to purchase the materials or hire the help needed to complete your renovation. If the contractor has liens or judgments against him, he might be less reliable in getting your job done.

Online resources like Experian’s ContractorCheck.com can give you the inside track on a contractor’s credentials. Known for its credit reporting and protection services, Experian also maintains a database of more than 5 million contractors and their businesses’ information. ContractorCheck.com allows consumers to view Experian’s verified data, which includes critical information such as:

* Company name, address and phone number
* Multiple operating addresses
* Length of time the company has been in business
* License, bonding and insurance information
* Contractor specialties
* History of liens, judgments and bankruptcies
* Credit review that will reveal any past collection or derogatory credit events
* Easy-to-understand contractor rating

Consumers often overlook one of the most valuable contractor screening elements — public record information such as liens or judgments against the business. An important fact, in 2010, 8.4 percent of the contractors in Experian’s database had a lien on file and 6.2 percent had a judgment filed against them.

Know the signs

The Federal Trade Commission offers the following tips for recognizing contractors who may be dishonest:

* Contractors who solicit door-to-door, only accept cash or who don’t have a phone number that is associated with a valid business should trigger your mental alarm. Likewise, beware of anyone who offers to discount your job because they will use materials left over from a previous job.

* Your contractor should obtain all necessary building permits for your job. Avoid ones who ask you to get permits for them, or find them new customers in exchange for a discount.

* If a contractor offers a quote that seems too good to be true, it probably is. An exceptionally long guarantee or an offer to discount your job if you agree to allow him use it as an example for seeking new business are often warning signs.

* Don’t give in to high-pressure pitches. If a contractor wants you to make an immediate decision on hiring them, or to fund your project through their preferred lender, consider taking your business elsewhere.

* Find out what others have to say about the contractor you’re considering. You need to do some word-of-mouth contractor research before committing. Ask the contractor for the names and numbers of past clients he has worked with. But keep in mind, even reputable contractors are only going to give you contact information for customers they know were happy with their work, so use these references as one more piece of background information, but don’t base your decision on them.

Making Your First Home Purchase Dream a Reality

Buying a home is more than numbers, dollars and cents. The pride of owning your own home is an incredible feeling, providing a place for you and your family to come together and build memories.

For many, getting through the process of buying a home can be daunting, if not downright frightening. Talk to anyone considering buying a home for the first time, and many will say the same thing: “There’s so much information – I don’t know where to start or where to turn for answers. It’s overwhelming.”

With all the potential pitfalls out there, it’s key to arm yourself with the right tools to help you navigate the intricacies of the home buying process. Getting the right information and help along the way will make this milestone purchase easier and hassle-free.

Knowledge is power

While partnering with a real estate agent and knowledgeable mortgage lender will go a long way towards home buying success, empowering yourself is also important. You are not alone, but you’re also your own best advocate.

Learn about the neighborhoods where you might want to live, and think about your day-to-day lifestyle when deciding what area – and type of home – is right for you. Take a home buyer education course – they’re often free and will help prepare you for the home buying process.

Real-ing and dealing

Partnering with a real estate agent can help make the process of buying your first home more efficient and hassle-free.  A real estate professional will help you assess your needs and wants in a home, and then utilize that information to narrow the field of available homes in your price range to a manageable pool. Well-versed in the local area, a real estate professional can help ensure you’re getting a better price, will negotiate on your behalf, and can protect your rights as a homebuyer. Your agent also may be able to make mortgage lender recommendations.

Find a financial partner, not just mortgage rates

Like buying a home, choosing a mortgage provider is about more than terms and rates – it’s about finding a company that has the knowledge to help you succeed.

“Find a lender who is also your financial partner,” says Mike Copley, executive vice president, retail lending at TD Bank. “Your mortgage advisor should work with you to find the borrowing solution that’s right for you, and make the experience as straightforward and hassle-free as possible.  Your lender’s commitment to you shouldn’t end with the closing of your loan.”

Some things to consider when selecting a mortgage lender: Will I be supported from application to closing – and beyond? Are there application fees? How quickly will I have a decision on my application? What type of mortgage should I choose? Does my mortgage provider service their own loans, or can they be sold to another institution later? Does my mortgage provider have a strong customer service focus, so I can ensure my needs are being met? The answers to these questions will help you forge the right partnership with the right mortgage lender.

There’s nothing to fear about buying your first home if you’re an educated consumer who finds the right real estate and mortgage team to help you make your dreams come true. So get out there and find your dream home!

Secrets of a Solid Home Inspection

Selling, buying or just putting a house on the market may raise many questions. Can I get a good price? Are there any problems I should fix prior to listing my house? If I buy this house, will I encounter problems that may make me regret my decision?

The sale price of a house depends on many factors, including the market, location, size of the property, age of the house, condition of the structure, what appliances might be included in the sale and even how nicely the property and building were landscaped and decorated – just to name a few.

Having a qualified professional inspect your house prior to putting it on the market – or for prospective buyers, before closing on a sale – can help guide your decision. But many homeowners and prospective buyers are unsure what’s included in a standard home inspection. A qualified home inspector will review these aspects of a property:

* Roof, attic and visible insulation

* Foundation, basement and structural components

* Walls, ceilings and floors

* Heating and central air conditioning systems

* Windows and doors

* Water fixtures and faucets

* Decks

Nearly two out of three homeowners recently reported they saved a lot of money as a result of having a home inspection during the selling/buying of a house. Sellers use inspections to help determine potential problems that can be repaired or replaced prior to listing – potentially getting them a higher sale price. And buyers use the inspections to determine if they want to invest in the property, or help negotiate for a better price that would include the repair and replacement of potential problems.

Not all home inspectors are certified and licensed. Always check with your local inspector for a complete list of services provided.

It’s important for homeowners to do their homework before hiring an inspector.

The following elements are not included in a standard home inspection:

* Septic system

* Electrical wiring and plumbing that is not readily accessible (for example, behind drywall or plaster)

* Water conditioning or softening system

* Swimming pool

* Backyard fences

* Lawn irrigation system

* Household appliances

* Compliance with local codes

* Appraisal to determine market value

Before hiring a home inspector, inquire about what is covered in the inspection and ask to see a sample report. Although some inspectors provide ancillary services, it may be necessary to consult a specialist for concerns that extend beyond a standard inspection. Often your inspector will help you make this determination.

Hiring a certified home inspector and having questions answered before putting your house up for sale – or before finalizing a purchase price – can not only help save money, but also allow you to go through the process with more peace of mind.

Tips to Bring Prospective Buyers Into Your House

Selling your house may be a challenge in today’s real estate market, but with a bit of elbow grease and some good planning tips, you can entice potential buyers to view your home, and hopefully make a viable offer.

Before you even list your house for sale, take a good look at the property and your home. Consider curb appeal. Freshen up your landscaping, pick up any equipment or toys lying around and update your lights so the home looks as welcoming during the evening as it does during the day.

Take a walk through your house, starting with the garage. If you have a lot of tools and equipment stored there, consider finding a new place to store everything, so potential buyers can really see the garage. Keep your tools handy, but still out of sight.

Next move inside. As you walk through the rooms, look at the walls, flooring, ceilings, lights and furniture. Paint is inexpensive, and a fresh coat can quickly spruce up the look of a room. If the room appears overcrowded, consider storing a piece of furniture to help open up the space.

You may determine some remodeling or repair work is needed prior to listing your home. If you have holes in your drywall, or gutters that are clogged or broken, these are easy improvements that won’t cost you a lot of money, but can help you sell your house faster.

Once you have your home looking good, do a little research to determine what list price you want to put on your home. Review prices for similar homes in your neighborhood and around your community. Pay to have your property assessed, especially if you do a couple of home improvement projects prior to the sale. And determine if you’d prefer to work with a real estate agent or try and sell the property yourself. There are benefits to both options, so research which might fit you better.

Your goal is to get your house sold, as quickly as possible and close to the price you’re asking. The best way to accomplish this is to get as many people looking at your property as you can. So before you decide to list your house, try some of these tips to put your best house forward.