Quarterly Newsletter – January 2004
Considering A Reverse Mortgage
Today’s steadily rising home values, lower interest rates, and greater public awareness are slowly fueling a jump in reverse mortgages. In contrast to past borrowers that tended to be widows in their late 70’s in desperate need of income, younger couples are starting to see reverse mortgages as a way to finance the lifestyle they want and need. Reverse mortgages allow homeowners 62 years and older to turn their home equity into tax-free csh.
The loans are expensive – with fees that range from $6,000 to $12,000 per loan – and because the loans diminish the value of the home to heirs, family members need to be part of the decision. However, older Americans in need of sources of cash may greatly benefit from a reverse mortgage. There are few up-front costs, and federal safeguards ensure homeowners will never owe more than the home’s value. The loan is repaid from the proceeds of the home sale after the borrower passes away or moves.
A reverse mortgage can offer an interesting solution for seniors who need cash to pay for long- term care services or insurance, home repair, or day- to-day expenses that become a burden in retirement. It is wise to consider all other options first, including local programs or services in your community that may be quicker and cheaper. Besides getting individual counseling before considering a reverse mortgage, other tips before borrowing include:
· Do your research – The Internet can provide general tips and in-depth details on how reverse mortgages works. Check out AARP’s reverse mortgage site at www.aarp.org/revmort, and the National Center for Home Equity Conversion’s site, www.Reverse.org.
· Be prepared to make complex decisions – Borrowers have to assess how they’d like payouts as well as choosing when to take adjustments on their variable interest rate.
· Tax and other considerations – Homeowners remain responsible for property tax, insurance and maintenance and payouts may affect Medicaid payments.
(Source: CBSMarketwatch.com. Reverse Mortgages Gaining. 7 Dec 2003. )
8 Red Flags to Look for When Hiring a Moving Company
With very few consumer protection laws in place when dealing with moving companies, minimize your risk of a scam or shoddy service the next time you move by keeping your eye out for these eight warning signs:
1. Deals that sound too good to be true - Be wary of rock-bottom prices. Get at least three estimates, and check out moving companies with your local Better Business Bureau.
2. No company visibility in your area – Don’t assume a nice website or ad in the yellow pages translates into a legitimate moving operation. Pick a company that has a physical presence in your area.
3. Refusal to visit your home prior to the move – An in-house estimate should be required and offered without asking. Avoid movers who only give estimates over the phone or refuse to physically examine the goods prior to moving day.
4. Requests for deposits – A legitimate company will not ask for a deposit, but will expect payment on delivery and before the shipment is unloaded from the truck.
5. Rates based on cubic feet – This method will not allow you to verify the amount you will be charged. Prices should be based on weight, which can always be verified by state-certified scales.
6. Blank documents and contracts – Moving scammers really do try to get consumer to agree to, and sign, blank documents. Don’t sign anything that you have not reviewed and approved.
7. Anonymous-looking trucks – Beware of a standard rental trucks or a truck with no distinct markings.
8. Demands for payment by cash – While cash can certainly be a payment option, moving companies are also required to accept personal checks or credit cards.
(Source: AARP Bulletin. September 2003. www.aarp.org)
Estate Planning on the Web
You may have heard of people turning to the Web for the preparation of an estate plan. While it may sound like a convenient option, it can also be minefield if you do not use caution and learn as much as you can before making important and potentially irreversible decisions.
When drafting your estate plan, the give and take that a trained lawyer can offer when dealing with sophisticated issues cannot be underestimated. Consider the following issues to determine the complexity of your estate and how useful the Web can be in devising your plan:
· Income and anticipated income – Estate planning increases in its complexity if you currently have significant income, or anticipate earning significant amounts during your career. If this is the case, simply answering questions on an Internet site or downloading a will form may not accomplish the results you are seeking.
· Estate planning goals – While some people have basic goals such as simply giving all their property to their spouse, others may want to leave money to charity, or accomplish some other results.
· Amount and nature of property – Issues regarding the amount and nature of property often dictate how an estate plan is drafted. A website may not allow you to Should you plan your estate on the Internet?ask the questions necessary to accomplish goals you are seeking such as, “Do you have a high net worth or a modest estate?” or “Are your assets tied up in a family owned business or are they ‘liquid’?”
Keep in mind that the “one-size-fits-all” approach to the law that most online estate planning offers is typically not the best option unless your situation is very basic. However, the Web can be a great tool in gaining as much information as possible before speaking to a professional.
(Source: MSNBC.com. Planning Your Estate Via the Web. 12 Nov 2003. http://www.msnbc.com/news/992234.asp)
As a Seniors Real Estate Specialist®, I have the training and resources to work with you on all of your real estate needs. I will work with you to provide you with information to benefit you as a homeowner. For more information on important Senior Issues, call me.