A Reverse Mortgage = Senior Home Improvements

 

                 

Seniors Finance Home Modifications with Reverse Mortgages               

Articles / dBNews Orange County
Date: Wednesday, May 21, 2008 03:27:59

With the arrival of summer many senior adults prepare to make home modifications to make their home more accessible and safe so they may stay in their home and live independently. Being able to finance these important home modifications can be a real problem, however, there are a number of options available to senior homeowners including the government-insured reverse mortgage.

According to the National Association of Home Builders (NAHB), remodelers have seen a 75 percent increase in requests for aging-in-place work. The aging population is one of the top issues to affect the remodeling industry over the next five years.

Senior homeowners overwhelmingly prefer to age in place: 89 percent according to AARP. Over 60% of seniors live in homes more than 20 years old. To age-in-place a home may need to be modified to make it easier and safer to carry out daily activities such as bathing, cooking, and climbing stairs.

Home modifications can help prevent accidents such as falls. One-third to one-half of home accidents can be prevented by modification and repair.

These modifications range from the installation of bath and shower grab bars and adjustment of countertop heights to the creation of multifunctional first-floor master suites and the installation of private elevators.

Selecting a remodeling contractor can turn into a nightmare, and with every spring there is an increase of home-repair fraud, especially among senior adults.

NAHB is a great source to start for information and help in selecting a reputable home remodeler. You may also want to consider a Certified Aging-in-Place Specialist (CAPS) who has been trained in the unique needs of the older homeowner. NAHB may be contacted at 800-368-5242 or by visiting their website at www.nahb.org.

Other sources for information on home remodeling include your local home builder’s association, the Federal Trade Commission, and the Better Business Bureau.

Many senior homeowners who need to make home modifications are unable to afford them. NAHB estimates that 80 percent of home modifications and repairs are funded from personal savings. Other options include a second mortgage, insurance coverage, federal and state programs, and foundations and organizations.

Area Agencies on Aging can direct senior homeowners to programs that may be available in their area to fund or make home modifications. To find your local Area Agency on Aging, call 800-677-1116 or visit their website at www.n4a.org.

According to a recent survey conducted by AARP, 46 percent of senior adults considering a reverse mortgage were for the purpose of paying for home modifications and improvements.

A reverse mortgage enables homeowners 62 and older to borrow against their home with no required repayment for as long as they live in their home. Credit and income are not used in qualifying for the reverse mortgage, and closing costs are typically financed, so there is usually no money out of pocket. Plus, a reverse mortgage does not affect Social Security or Medicare Benefits.

“A reverse mortgage is ideal for financing the cost of home improvements and repairs because of the flexibility in structuring how funds are received,” Kent Kopen, Reverse Mortgage Specialist at 1st Metropolitan Mortgage® said. “Seniors may receive a lump sum, a line of credit to draw from when needed, monthly payments, or a combination of these options.”

As the season turns from winter to summer, senior adults need to get started making home modifications and improvements that will keep them safe, comfortable and independent in their home for the rest of their lives.

This article comes from dBusiness News
http://banking.dbusinessnews.com The URL for this story is:
http://banking.dbusinessnews.com/shownews.php?newsid=158921&type_news=latest

 

Housing Accord: Senate Draws Near (Must still meet with House)

 

Might there be a housing rescue bill after all?

Monday night Senator Chris Dodd (D-CT and Senator Richard Shelby (R-AL), Chairman and Ranking Member of the Senate Committee on Banking, Housing, and Urban Affairs announced that they had reached an agreement that will be presented to the whole committee on Tuesday.President George Bush has repeatedly said he would veto earlier versions of the bill, including one passed by the entire House, because they would involve the use of taxpayer money and would bail out lenders and speculators.         

Dodd and Shelby think that their compromises to “The Federal Housing Finance Regulatory Reform Act of 2008″ has eliminated those problems and the Administration said it was willing to consider the Senate version which shifts the burden of financing to the two government sponsored enterprises (GSEs) Freddie Mac and Fannie Mae.

The new compromise legislation would create an affordable housing fund, financed by Freddie and Fannie which would be used in year one to provide about $500 million for foreclosure relief.

Like the House version of the bill which passed the whole House earlier, the Senate bill includes a provision authorizing the Federal Housing Administration to guarantee fixed-rate 30-year loans after lenders had reworked them to lower the principal balance to reflect current housing prices.

The Congressional Budget Office estimated that the effort would result in remediation of about one-half million mortgages over five year at a cost to taxpayers of $2.7 billion. By reducing the time-frame of the legislation to three years and taking money from the housing fund, the cost to taxpayers is expected to be eliminated.

The fund would collect a subsidy of one-half cent on every dollar of mortgages purchased by Fannie Mae or Freddie Mac and would tighten regulation of the two GSEs by creating a new Federal Housing Agency which would oversee the companies.

 

The bill would also set a new limit on conforming loans of $550,000 in the most expensive markets. The current conforming loan limit is $417,000 but there were patchwork exceptions to this – with some loans for as much as $729,250 authorized in very expensive markets – in legislation passed earlier this year.

Those emergency limits are set to expire at the end of the year.

“This legislation is good news for both the markets and homeowners,” said Dodd. “The bill addresses the root of our current economic problems – the foreclosure crisis – by creating a voluntary initiative at no estimated cost to taxpayers which will help Americans keep their homes.

 

The bill also establishes a new fund that will help create more affordable housing for millions for Americans.

Finally, this legislation takes a balanced approach toward reforming the GSEs, creating a world class regulator with enough authority to help these vital institutions operate in a safe and sound manner, while better fulfilling their important mission of providing affordable housing for Americans.”

Senator Shelby, a strong proponent of GSE reform, said, “In my judgment, the new GSE regulator created under this legislation would be granted much needed authority and flexibility to regulate the GSEs appropriately.

 

Ultimately, a strong regulator will better serve the interests of homeowners and taxpayers for years to come. I’m also pleased that the Hope for Homeowners proposal is paid for. I’ve long said that we should do what we can to help struggling homeowners, short of asking the taxpayer to foot the bill”.

——————————————————–
Story Information

Title: Senate Nears Accord on its Version of Housing Rescue Bill
Date: Tue, 20 May 2008 08:54:45 EST