Reverse Mortgages are available to anyone who is over 62 years of age, owns their home and uses it as their primary residence. It is a very good option if you need cash and want to stay in your home for as long as possible.  In a nutshell, Reverse Mortgages work by allowing borrowers to swap the equity in their homes for cash, while still owning and living in the house. Currently, the only place to secure this type of financing is through the Federal Housing Administration’s Home-Equity Conversion Mortgage program, or HECM. The HECM loan limit is currently $625,500, and there are many things that will determine how much a borrower will qualify for. Some of these things are the age of the borrower, current interest rates and the property’s value. If you do qualify, you have several choices on how to receive your money. You can be paid a lump sum up front, opt for a monthly cash payment, or choose a combination of the two. The only downside to Reverse Mortgages are the fees. They are high, ranging from $7,000 to $20,000. You will also have to pay an origination fee and an insurance premium. On the upside, this insurance does guarantee that your total debt can never be more than the home’s value. For more information and a list of brokers go to ReverseMortgage.org.

Putting your house on the market is always a challenge in that you must look for ways to make it the most appealing it can be to potential buyers. Beyond the tried and true rules of emptying closets and keeping all rooms tidy and clean, here are some things you may not have thought of that can have major impact during a showing or open house.

• If you have a small room in your home that you would like to appear more spacious, paint it the same color as the room it is attached to. This will convey a more seamless, spacious feel. Another trick to convey spaciousness is to keep all window treatments in small rooms the same shade as the walls.
• Paint your sun room an attractive shade of green. It really does help to bring the outside in!
• If you have a narrow room, add wall shelving. This gives the space depth, without crowding out occupants.
• If you are upgrading to sell, choose Eco-friendly materials. Buyers are showing more interest in homes with these materials. For example, consider cost-efficient and “green” cork flooring instead of hardwoods.
• Consider breaking up a finished basement into “zones”. For example, furnish one area for reading, another area for a bar, one for games, one for a workspace with a desk and another for lounging in front of the television.
• If your kitchen is outdated and you do not want to renovate, replacing old appliances is highly suggested. Studies show that sellers recoup every penny spent on new appliances!

More and more people are considering purchasing houses that are being sold due to foreclosure or at auction. Many of these homes may have had lapses in maintenance or other issues that home buyers must be wary of. Never purchase a home without hiring an inspector to look it over first. Here are some of the problems that you can be on the look out for during the viewing stage, which can cause a buyer significant and costly problems:

• Too many homes for sale on the street. Are any boarded up? Always keep an eye on the other houses near the one that you may purchase. They will tell you a lot about your possible future investment.
• Outdoor maintenance is often very telling of what is going on “underneath”. If the home you are looking at has straggly foundation plants or broken gutters, what else could be wrong?
• Foundation damage is always a major consideration. Check for proper grading and cracks bigger than 1/3 of an inch. Many times this can mean major structural issues.
• Strong odors outside and inside almost always indicate something “bad”. Investigate further.
• Be on the lookout for flickering lights and always check face plates for heat. This could mean faulty wiring.
• Windows with fog or water in between double-paned windows can signify trouble lurking.
• Stains and/or saggy walls usually indicate water damage, mildew or mold. An inspector must check for leaks and mold.
• Keep your eyes peeled during your tour for pests and rodents. Seeing evidence at this early stage is never a positive sign.

 

The American Recovery and Reinvestment Act of 2009 has several other provisions that will benefit home buyers and the housing market. The legislation:

Will help home buyers in high-cost markets by extending the FHA, Fannie Mae and Freddie Mac loan limit of $729,750 through the end of 2009.

Allows state housing finance agencies to help buyers at closing by advancing the credit as a loan using proceeds from tax-exempt bonds.

Extends the tax code section 25C credit for energy-efficient home improvements through the end of 2010; increases the credit rate from 10 percent to 30 percent; raises the lifetime cap from $500 to $1,500; expands the list of eligible improvements.

For 2008 operations, expands the net operating loss carryback period from two years to five years for small businesses (businesses with average gross receipts of no more than $15 million over the previous three years).

Temporarily allows exchange of Low-Income Housing Tax Credit allocating authority for tax-exempt grants and appropriates $2 billion in HOME funding for affordable housing projects.

Provides a “patch” for the Alternative Minimum Tax for tax year 2009.

Increases bonus depreciation and section 179 small business expensing for business investment in 2009.

Increases New Markets Tax Credit allocating authority for 2008 and 2009.

Delays for one year—from 2011 to 2012—the start of the three percent government contractor withholding requirement.

Since home prices have continued to fall, Freddie Mac has determined that they are at a heightened risk of many more mortgage defaults and claims.  They report that there may be even more of a housing price decrease in 2009. In light of this news they have increased several fees and added new ones. One of their new fees is a 0.75% fee of the loan amount on certain condominium mortgages when the loan equals more than 75% of the estimated condominium value. Their increases include fees on the following types of mortgages:

• Loans that let borrowers pay interest in the primary years and defer principal payments
• Refinance loans that allow the borrower to cash out some of their home equity
• Loans with certain combinations of low credit scores and down payments
• Condominium mortgages

The National Association of Realtors and the National Association of Home Builders have protested these increases, as they claim that these additional costs are discouraging potential home buyers and people considering refinancing their loans.

Current studies are showing a disturbing trend among first-time homebuyers. Compared to just ten years ago, today’s first-time homebuyers are not as likely to consider the “fixer-upper”. Surveys show that many first-time homebuyers state that “affordability” is their number one concern, but at the same time also consider the “move-in condition” of the home to be very important as well. Only seven percent are considering the smaller, fixer-upper home. Experts want to remind first-time buyers that homes that may only need basic face lifts such as fresh paint, carpet, landscaping or even just window treatments can come with very large savings. Experts now strongly suggest purchasing that fixer-upper as a way to build equity over time, and then later moving up to a second-stage home, which may then meet “move-in condition” expectations. Some pluses to ponder purchasing a  fixer-upper are that many sellers of this type of home are generally more interested in selling quickly, than by making a huge profit. Also, good savings may be found on homes that have been listed for over ninety days, homes owned by long-term owners, and house-flipping investors that may be eager for a sale.

In today’s market if you have a good credit score or have lots of cash available to you, you may be considering purchasing a foreclosed home. This can be a very good opportunity to make some money, but if you have ever tried to get information on a specific foreclosure you have probably found that the process is not so easy. Most real estate agents do not have the knowledge to complete this kind of sale and lenders give little, if any, information on these properties. What this boils down to is that you will have to do most of the research on your own. Some ways to make this process easier on yourself are to pick one neighborhood, and stick to it. Research the neighborhood’s property values and make sure there are not too many forclosures there. Make sure that there is potential for job growth down the line in this particular neighborhood. Drive the neighborhood and focus on finding a home that may need some work. Consider contacting the homeowner yourself, as they may consider selling you the property directly. Another way to learn about the property you are interested in is to go to the local assessor’s office. They will be able to tell you the property owner’s name, the home’s tax information, it’s assessed value, it’s square footage and even what the current owner paid for the home. Once you know what the seller wants, you are one step closer to being able to negotiate a deal. If at all possible, try to find an agent that has some qualifications with this type of transaction. They will undoubtedly make the whole process easier for you and the seller, as they will better understand the complexities of this kind of transaction.

Most people keep safety knowledge filed away in their heads, but what every household really needs is an actual checklist that can be posted and referred to yearly to keep everyone safe. Here are some tips and reminders about some of the things that may not be so obvious:

• Fire Safety includes keeping pot and pan handles turned away from the outside of the stove when cooking, so they can not be bumped into.
• Keep all space heaters at least one foot away from anything that is flammable, such as furniture, draperies, even people.
• Never store propane tanks indoors.
• Electrical safety includes never putting electrical cords across doorways or under carpets.
• Never plug major appliances into extension cords; separate outlets only.
• Consider an electrical inspection for your home. 400,000 fires per year are due to faulty electric wiring.
• Test smoke and carbon monoxide alarms periodically and change batteries yearly.
• Devise a home fire escape plan that includes more than one exit and that every family member knows about.
• Teach children to call 911 from a neighbor’s phone in the event of a fire.
• Affix rugs to the floor to avoid slipping.
• With children in the home, always attach brackets to bookshelves.

Whether you are planning to put your home on the market or are just looking for cost effective ways to increase your home’s curb appeal or its value, landscaping is key. Real Estate experts report that mature trees and a well-landscaped yard can increase your home’s value by ten to twenty-five per cent. Poorly landscaped homes actually detract value from that home. Here are some ways to start making your landscaping work for you:  

• Invest in a larger tree. Mature trees add significant value as they provide shade, privacy and major aesthetic appeal. 
• Critical is the tidy, well-maintained lawn. Patchy and/or bald-spotted lawns are screaming for help. They need regular seeding, aerating and fertilizing. Mow it regularly and during peak growing season never cut away more than a third of the blade each time you mow. See The Organic Lawn Care Manual for excellent information.
•  Always stay on top of pruning, but avoid over-pruning your shrubs into ball or square shapes.
• Keep beds weeded and mulched for that neat, tidy look.
• Be consistent about weeding in between pavers and concrete cracks.
• Keep your lawn clutter-free. No unused children’s play toys, empty plant containers or junk about.
• Plant annuals for all-season long color.
• Always sweep your porch and deck or patio. Power-wash all surfaces if necessary.

As everyone knows, spring is the most desirable time to put your house on the market as the weather seems to always cooperate and your landscaping’s appeal can be fully realized. But if you simply must list your home during the winter months, here are a few things that you can do to make the undertaking a little bit less challenging.  

1. Keep dead tree limbs picked up.
2. Keep driveway, steps and walkways plowed, shoveled and salted at all times.
3. Keep gutters clean - so no icicles can form.
4. Replace weather-stripping as needed to keep drafts away.
5. Keep all valves to outdoor spigots turned off to avoid burst pipes.
6. Holiday decorations should be put away as soon as possible.
7. Keeping a roaring fireplace during an open house this time of year is always a good thing.
8. Keep lists handy for all potential buyers of all of your home’s energy efficiencies, i.e. wrapped pipes, extra insulation, new windows, etc.
9. Keep all windows clean to let in as much light as possible. Remove all screens to storage and take down any heavy drapes. This will let in that extra light that so many potential buyers will be demanding this time of year.
10. Keep as many lights on as possible during showings. If you cannot be there, set lights on timers and add motion sensors to walkways. You may even consider installing motion detectors for walk-in closets.
11. Keep photos around your home showing the house in all seasons. A nice shot of your blooming flowers and lush green shrubs will help potential buyers understand what is under all of that snow!