RE/MAX 440
John F. O'Hara

John F. O'Hara
731 W Skippack Pike  Blue Bell  PA 19422
Phone:  610-277-4060
Office:  215-643-3200
Cell:  267-481-1786
Fax:  267-354-6973

My Blog

Retiring Homeowners FAQ: What the Heck Is a HECM?

May 6, 2016 12:54 am

The number of retiring homeowners is projected to expand exponentially in the coming years. Maximizing your real estate investment can help underwrite retirement expenses. For your consideration: the Home Equity Conversion Mortgage (HECM).

HECM is the Federal Housing Administration's (FHA) reverse mortgage program, which enables homeowners to withdraw some equity in their home in a fixed monthly amount, a line of credit, or a combination of both. 

To be eligible for a FHA HECM, you must:

• Be a homeowner 62 or older;
• You must live in the home;
• Own your home outright, or;
• Owe a low mortgage balance that can be paid off with proceeds from the HECM, and;
• Have financial resources to pay ongoing property charges like taxes and insurance.

You are also required to receive consumer information free or at very low cost from a HECM counselor prior to obtaining the loan.

A longevity annuity can also be a useful tool. Retirees aged 65 could draw $3,000 a month to age 100 with assets of $600,000, at which point their assets would be fully depleted. Retirees could use $200,000 of their nest egg to purchase a longevity annuity that begins payments of $3,000 after 10 years. These same retirees could draw on a reverse mortgage credit line to bolster their retirement income, as long as they had sufficient equity in their home.

Retirees with equity in their home who depend on pensions (rather than a nest egg of financial assets) can supplement their pension income using a HECM reverse mortgage in either of two ways. One way is to exercise the “tenure” option under the HECM program, and receive a fixed annuity payment for as long as the retiree remains in the house. The second way is to exercise the credit line option, using some or all of it to purchase an immediate annuity from a life insurance company.

You can find a HECM counselor online at HUD.gov, or by phoning 800-569-4287.

Published with permission from RISMedia.


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8 Ways to Boost Your Home's Value

May 6, 2016 12:54 am

Improving the look and functionality of your home goes a long way toward boosting its value. But what types of renovation are today’s buyers looking for?

Consumer Reports reveals the most sought-after amenities:

Allowance for Aging in Place – As people are living longer and the number of senior citizens continues to increase, buyers see the long-term value of walk-in showers, comfort-height toilets and master bedrooms on the main floor.

Color and Light Matter – Fresh paint, natural color schemes and window treatments that let in the light will improve the look, as well as the value, of your home.

Energy Efficiency – Buyers are interested in energy costs and efficiency. ENERGY STAR appliances, high-efficiency windows and LED lighting help to lower the cost and increase your home’s ‘green’ appeal.

The Great Outdoors – Up your home’s curb appeal by keeping lawns and shrubbery neatly trimmed. Also high on buyers’ wish lists are a water-smart yard, a deck or patio and a built-in grill.

Kitchens Top the List – Buyers want a clean, updated and well-organized kitchen. A new coat of paint or modernized lighting can be inexpensive starts. Increasing the value exponentially are quartz counters, attractive cabinetry and stainless steel appliances.

Smart Technology – Some high-tech features may lose value as technology continues to evolve, but security systems, whole house generators and programmable thermostats controlled by smartphones will add value for their efficiency and convenience.

Updated Systems and Surfaces – Central air conditioning and updated mechanical systems, including water heaters and gas heat, can increase a home’s value by 3 to 5 percent. A newer roof and hardwood flooring are also much in demand.

Workable Floor Plans – Regardless of the size of your home, strategically increasing the living space is sure to boost its value. A more open floor plan, a finished basement or a dedicated playroom or office space appeals to the needs of young families.

Published with permission from RISMedia.


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